Trezor Backtracks on ‘Travel Rule’ App for Self-Hosted Crypto Wallets Amid Uproar

SatoshiLabs, Trezor's creator, scratches its planned integration of the Address Ownership Proof Protocol (AOPP).

AccessTimeIconJan 28, 2022 at 5:48 p.m. UTC
Updated May 11, 2023 at 5:56 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

SatoshiLabs, the creator of the Trezor hardware wallet, has shelved plans to adopt an automated protocol for proving ownership of a self-hosted wallet when withdrawing digital assets from an exchange in Switzerland, where that's a requirement.

The U-turn from Trezor followed a Twitter storm from customers and privacy buffs.

  • Market Maker KeyRock Secures Swiss Anti-Money Laundering Clearance
    00:34
    Market Maker KeyRock Secures Swiss Anti-Money Laundering Clearance
  • Ripple Exec on CBDC Platform, Metaco Acquisition
    13:02
    Ripple Exec on CBDC Platform, Metaco Acquisition
  • Swiss Regulator: Switzerland Faced a Bank Run if Credit Suisse Was Allowed to Go Bankrupt
    07:51
    Swiss Regulator: Switzerland Faced a Bank Run if Credit Suisse Was Allowed to Go Bankrupt
  • How Credit Suisse Developments are Impacting the Crypto Market
    02:13
    How Credit Suisse Developments are Impacting the Crypto Market
  • Trezor announced Thursday it would integrate the "Address Ownership Proof Protocol" (AOPP), created by 21 Analytics, a Swiss fintech firm specializing in bringing crypto firms up to speed with anti-money laundering (AML) requirements set out by the Financial Action Task Force (FATF), a global financial watchdog.

    “Adopting AOPP was a small step toward improving usability for a portion of our customers with restricted access to bitcoin,” a SatoshiLabs spokesperson said Friday via email. “It was not a step taken due to any external pressure, regulatory or otherwise, and no similar implementations are planned.”

    The reaction from the crypto community speaks to a growing tension when it comes to the steady march of AML regulations into the private reaches of self-hosted wallets.

    Switzerland (and Singapore for that matter) have gone beyond the FATF recommendations for data sharing among virtual asset service providers (VASPs) to include the identification of private wallets transacting with VASPs in those places.

    AOPP doesn't compromise users’ privacy, as the personal data being made automatically available is already known to the Swiss VASPs, 21 Analytics has pointed out. The application is meant to simplify the digital signing of data that corresponds to a specific destination address.

    However, Crypto Twitter didn’t see it that way.

    “I didn’t expect this reaction from the Twitter Bitcoin Community. For the users affected by this regulation, AOPP is a great benefit, requiring user opt-in to perform any actions,” 21 Analytics CEO Lucas Betschart said in an email to CoinDesk, adding:

    “Others seem to see it as a threat, opening the door for further measures. This is not the intent. I apologize for the confusion and welcome contributions to the open-source standard to help people withdraw their coins to their own wallets while not opening doors for limiting anyone’s freedom.”

    Rival firms BlueWallet and Sparrow Wallet similarly backed down on AOPP after yesterday’s outcry.

    Disclosure

    Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

    CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

    Ian Allison

    Ian Allison is an award-winning senior reporter at CoinDesk. He holds ETH.


    Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.