Sumsub, a global full-cycle verification and compliance provider, has completed the integration of its Travel Rule solution with Binance, the crypto exchange platform, through the Global Travel Rule (GTR) Alliance.

Sumsub hopes to support Virtual Asset Service Providers (VASPs), financial institutions, and fintech companies involved in crypto transactions in validating transaction data when working with Binance, via the integration.

The new integrated solution will look to provide access to a large ecosystem of Virtual Asset Service Providers (VASPs) who are participants of Sumsub Travel Rule ecosystem, as well as financial institutions and fintech companies involved in crypto transactions to ensure secure transaction data validation when dealing with Binance entities which in total encompass over 183 million users.

By leveraging Sumsub’s crypto expertise and cutting-edge technologies, the companies are building interoperability to address the so-called sunrise issue, which is the biggest challenge in the crypto compliance space – namely, that the counterparties are not reachable due to the fact that not all VASPs become obliged to adhere to the Travel Rule requirements.

Steve Christie, deputy chief compliance officer at Binance, commented: “Global Travel Rule Alliance is an exciting step forward in solidifying our international compliance efforts.

“We’re particularly enthusiastic about the ability it gives us to consolidate our efforts globally, moving past the challenge of fragmented regional integrations. This move doesn’t just bring us into alignment with FATF’s global standards – it’s about proactively providing our extensive user base with the assurance that their data and transactions are secure. This alliance amplifies the trust, security, and transparency that our users can expect at Binance.”

With a focus on global interoperability, regulatory assurance, and market credibility, the partnership is a giant step towards ensuring streamlined and interconnected cryptocurrency transactions.

Ensuring interoperability in the crypto space

Founded in 2017, Binance has been among Sumsub’s clients since 2021. In March 2023, Sumsub benchmarked the crypto industry by launching its protocol-agnostic Travel Rule solution, offering a full compliance toolkit across the whole customer lifecycle.

Jacob Sever, co-founder and chief innovation officer at Sumsub, explained the importance of the development: “Integrating with Global Travel Rule Alliance is a significant milestone for us, underscoring the importance of collaboration in the crypto space. The integration of the GTR protocol with Sumsub’s Travel Rule solution is a major advancement in ensuring interoperability and addressing the sunrise issue.

“By enabling seamless interaction between members of both ecosystems, this partnership not only enhances the infrastructure of the global crypto ecosystem but also fosters trust both within and outside the industry. Looking forward, Sumsub is empowered to work toward natively integrating other protocols into its Travel Rule solution in the future.”

In October 2023, Sumsub analysed over 800,000 fraud attempts and millions of verification checks within the crypto sector between 2022 and 2023 and surveyed over 100 crypto companies. It released its findings in its ‘State of Verification and Monitoring in the Crypto Industry 2023‘ report. According to its findings, Travel Rule remains one of the two main challenges for crypto companies worldwide, the other one being more advanced fraud methods such as AI-generated deepfakes.

Binance Academy, a free educational platform helping people learn about cryptocurrency, is partnering with the Blockchain Center, a global research lab, and ENSET-Université Hassan II de Casablanca to extend its Global University Outreach Program (GUOP) to Morocco. 

Binance Academy and Blockchain Center are hoping to reshape the educational landscape for blockchain technology by integrating a blockchain engineering course into the university based in Casablanca, Morocco.

The initiative focuses strongly on blockchain engineering and compliance education and aims to educate over one million students globally by 2026.

Mahmoud Jawwad, global business development at Binance Academy, said: “As blockchain technology anchors its importance across diverse sectors, it is our privilege to spearhead this movement, ensuring that students are equipped with top-notch education.

“This collaboration is a testament to our mutual dedication to fostering blockchain education and nurturing the succeeding generation of industry trailblazers.”

The Blockchain Center originally launched GUOP in 22 universities in Kazakhstan and has now expanded its footprint to over 200 universities, spanning over 50 countries, in collaboration with Binance Academy.

Aigerim Gilmanova, head of education initiatives at the Blockchain Center, commented: “Expanding our programme to Université Hassan II de Casablanca allows us to cultivate an atmosphere conducive for curious students to explore, innovate, and experiment in the field of blockchain technology.”

ENSET-Université Hassan II de Casablanca will participate in specialised 10-week online training sessions for university educators in Blockchain Engineering. This collaborative effort plays a substantial role in building a comprehensive academic knowledge reservoir, enabling seamless blockchain engineering and compliance course integration into the university’s curriculum.

Professor Omar Bouattane, speaking for the ENSET-Université Hassan II de Casablanca, also said: “This partnership aligns with our aim to remain at the forefront of technological progress and equip our students with future-ready skills. We anticipate actively contributing to GUOP’s success and pushing the boundaries of blockchain education worldwide.”

The cryptocurrency ecosystem is celebrating as it is one step closer to becoming a part of the mainstream financial world. The US has become the ninth country to approve a spot Bitcoin exchange-traded-fund (ETF) following the Security and Exchange Commission‘s (SEC) latest announcement. 

On 10 January 2024, the US regulator approved the listing and trading of a number of spot bitcoin exchange-traded product (ETP) shares. This means that US investors, both institutional and retail, have a clear way to track the movements of the crypto and can make purchases without having to set up an account or digital wallet with an unregulated exchange. Nor do they need to rely on the more expensive Bitcoin futures ETFs (which were approved by the SEC in 2021).

The announcement was made following an uncertain 24 hours in which the SEC’s X account was hacked and a tweet was made saying that the spot Bitcoin ETF approval had been made, on 9 January 2024. This caused the price of Bitcoin to jump around 2.5 per cent. This caused a $40billion swing in the combined value of total Bitcoin.

Following its legitimate approval though, on January 11, 2024, Bitcoin had a value of $47,000. While it’s still a long way off from its highest valuation of $69,000 in November 2021, it is almost three times its worth ($16,000) in December 2022, following the FTX collapse.

From the Commission’s point of view

Crypto enthusiasts have long called for some form of spot Bitcoin approval from the SEC. However, the Commission had disapproved 20 filings for an ETP between 2018 and March 2023. Discussing why approval was given this time, the SEC’s chair, Gary Gensler said: “The US Court of Appeals for the District of Columbia held that the Commission failed to adequately explain its reasoning in disapproving the listing and trading of Grayscale’s proposed ETP (the Grayscale Order).

“The court therefore vacated the Grayscale Order and remanded the matter to the Commission. Based on these circumstances and those discussed more fully in the approval order, I feel the most sustainable path forward is to approve the listing and trading of these spot Bitcoin ETP shares.”

Having explained how investors would be protected under the new ruling, Gensler concluded: “Though we’re merit neutral, I’d note that the underlying assets in the metals ETPs have consumer and industrial uses, while in contrast, Bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”

Hester M. Pierce, commissioner at the SEC took a more positive outlook on the approval saying: “Although this is a time for reflection, it is also a time for celebration. I am not celebrating Bitcoin or Bitcoin-related products; what one regulator thinks about Bitcoin is irrelevant. I am celebrating the right of American investors to express their thoughts on Bitcoin by buying and selling spot Bitcoin ETPs.

“And I am celebrating the perseverance of market participants in trying to bring to market a product they think investors want. I commend applicants’ decade-long persistence in the face of the Commission’s obstruction.”

Turning a new page for crypto

Once the approval was made official, both big and small names in the crypto industry were quick to celebrate the news. Many believe the decision will usher in a new wave of crypto players with it seemingly becoming a more accepted mainstream asset.

Commenting on this, Richard Teng, CEO of global crypto exchange Binance said: “The approval marks a new level of acceptance, maturity and popularisation of the active crypto market. It makes the industry more credible and opens up the potential for more innovation.

“Furthermore, the approval will attract more investors and liquidity. While it is not easy to anticipate the scale of new entrants and market dynamics (which are subject to market dynamics themselves), it is useful to note that the introduction of gold ETFs in 2004 resulted in seven years of positive price action. Coupled with this year’s Bitcoin Halving event, these events could create a dynamic market for Bitcoin.”

“This moment cannot be overstated”

Celebrating the news, Brad Garlinghouse, CEO of crypto and blockchain solutions provider, Ripple said on X:

The significance of this moment cannot be overstated.

Congrats to all who have worked to get Bitcoin spot ETFs approved!

Today’s news is further legitimization of crypto as an asset class. I expect this will be yet another catalyst for institutional investment / adoption,… https://t.co/3jlqQYm0Xl

— Brad Garlinghouse (@bgarlinghouse) January 10, 2024

Mainstream acceptance

Further elaborating on what the approval means, Sheila Warren, CEO of the Crypto Council for Innovation, the global alliance working to advance innovation and inclusive regulation, said: “The introduction of a spot Bitcoin ETF isn’t just about market dynamics, it’s a catalyst for regulatory evolution. It necessitates a framework that accommodates the unique nature of crypto, potentially leading to more appropriate and informed regulatory policies in the crypto space.

“A spot Bitcoin ETF is a precursor to a plethora of innovative financial products and services that straddle the line between traditional finance and cryptocurrencies, expanding the horizon for what’s possible within the crypto ecosystem. The ripple effects of a spot Bitcoin ETF could lead to a recalibration of market dynamics, aligning them closer to traditional financial markets, yet retaining the distinct characteristics of the crypto world.”

A fundamental change to the industry 

Every time the crypto market crashes, the naysayers come out in full force declaring the era of crypto to be over. However, this has yet to be the case. With the SEC now approving spot Bitcoin ETFs, this is arguably even less likely to happen.

Explaining why crypto is here to stay, Eric Demuth, co-founder and CEO of investment platform Bitpanda said: “Whatever the cause, the approval of a Bitcoin Spot ETF is a huge milestone. From now on, long-term capital from institutional investors will flow into the crypto market. This decision will fundamentally change the industry.

“Until now, many institutional investors were unable to operate in the crypto sector within their regulatory framework, as they have to invest in traditional financial products. The Bitcoin ETFs that are now available will be a hugely important tool for institutions and major banks in the US.

“I believe that the approval of a Bitcoin Spot ETF will further encourage the mass adoption of crypto-assets by institutional investors in the US. Institutional investors may be more willing to invest in Bitcoin if they have access to it through investment products such as ETFs. This is the next step into mainstream finance. Crypto is here to stay.”

An investment just like a gold ETF 

Throughout 2023, crypto regulation was a hot topic with regulators clashing with exchanges on a common basis. However with regulations becoming established, this move by the SEC is yet another way to show how crypto is becoming widely accepted as a legitimate asset explains Sasha Skoryk, head of banking at Clear Junction, the global payments solution provider.

“As a leading B2B payments platform that’s committed to enabling fiat and crypto transfers in regulated environments, Clear Junction recognises the transformative power of these approved Bitcoin ETFs in giving greater legitimacy to crypto in tandem with regulatory frameworks being adopted worldwide.

These developments will give much-needed clarity, reassurance and confidence for institutional and retail investors in crypto as a legitimate and trustworthy instrument. Banks, financial institutions and others that have previously been wary of engaging with crypto can move forward with the knowledge that crypto is now a mainstream investment instrument just like a gold ETF or a NASDAQ-tracker fund.”

A United States court has entered an order against crypto exchange Binance and its former CEO Changpeng “CZ” Zhao, which will see Binance pay $2.7 billion and CZ pay $150 million to the Commodities Futures and Trading Commission (CFTC). 

In a Dec. 18 statement, the CFTC announced that the U.S. District Court for the Northern District of Illinois had approved the previously announced settlement and concluded the enforcement action first issued by the CFTC in November. 

“In formalizing the settlement initially announced on November 21 the court finds Zhao and Binance violated the Commodity Exchange Act (CEA) and CFTC regulations, imposes a $150 million civil monetary penalty personally against Zhao, and requires Binance to disgorge $1.35 billion of ill-gotten transaction fees and pay a $1.35 billion penalty to the CFTC,” wrote the CFTC in a statement. 

This is a developing story, and further information will be added as it becomes available.

Binance and other cryptocurrency firms based in the United Arab Emirates are optimistic that the country will remain a hotspot for virtual assets despite a potential shift to the United States should the Western superpower become a more crypto-friendly jurisdiction.

The “regulation by enforcement” regime in the U.S. has pushed global crypto firms to move to locations such as the UAE, the United Kingdom, Switzerland, and Singapore. However, the idea that companies could potentially return to the U.S. should there be a change in direction was floated during a panel discussion on Dec. 11 at the Global Blockchain Congress event in Dubai .

Highlighting the UAE’s approach toward technology and innovation, Alex Chehade, Binance’s general manager for the Middle East and North Africa, said the local government has built infrastructures around numerous initiatives that encompass not just AI but also Web3, sustainability and other verticals:

“[People exiting] wouldn’t be the worry. We’d probably be worried [about], ‘do we have enough infrastructure for people coming in?’”

“The track record is there… We’ve got the education system, healthcare system, the roads, the trains. Where else would you relocate? To the other jurisdictions? They’re not issuing Visas. They don’t have the infrastructure,” he added.

Chehade said Binance, which recently withdrew its fund manager license in Abu Dhabi and saw its former CEO Changpeng Zhao plead guilty as part of a $4.3 billion settlement with U.S. agencies, will stay in the region, with its custody license in the UAE capital, and operational minimum viable product permit for exchange and brokerage services in Dubai.

Meanwhile, Feras Al Sadek, managing partner at blockchain private investment firm Ghaf Capital Partners, argued that the UAE leads through its “regulation by education,” highlighting local regulators’ approach of actively supporting projects through various engagements, including conferences and meetups. He said:

“It’s very hard to find regulators… fighting, educating and supporting these companies. So that I think is a key differentiator between us and the rest of the world.”

Al Sadek also pointed out the UAE’s goal of becoming a tech industry leader by employing thousands of personnel in emerging technologies, including 30,000 in artificial intelligence by 2030.

Related: Dubai regulator grants crypto license to Bahrain’s CoinMENA

Crypto Oasis Ventures co-founder Faisal Zaidi said that the UAE’s lifestyle and business community have made it appealing for nonresidents to stay, adding, “You come in with a plan [to live here short-term], but because of how your life is here… the communities and the ecosystem, people end up staying. He added:

“Maybe there [will be] a slowdown in newer organizations coming, but the ones that are here are going to stay.”

The wave of government enforcement against crypto companies in the U.S. has pushed away crypto firms, with industry leaders suggesting crypto startups should avoid the jurisdictions for the time being and the U.S. Securities and Exchange Commission (SEC), headed by chair Gary Gensler, earning the ire of the crypto community.

However, the landscape may be shifting toward a more favorable direction for the crypto community, with U.S. Senators Cynthia Lummis and Kirsten Gillibrand reintroducing a bill to create a crypto regulatory framework in July.