Crypto.com – a maker of cryptocurrency exchange, wallet, debit card software and cryptocurrency app – leverages the compliance tool with a commercial solution developed by CipherTrace.
CipherTrace, which goes by the name Traveler, gets its name from the fact that it is designed to meet the complex requirements of the so-called “travel rule” that came into force for Virtual Asset Service Providers (VASPs) in 2020.
The itinerary issued by the Financial Action Task Force (FATF) requires regulators and VASPs, including cryptocurrency exchanges, custodian service providers and OTC trading venues, to collect and share customer data during transactions. This approach generally complies with the requirements already in place for remittances in jurisdictions such as the United States, which require them to record personally identifiable information about all parties involved in remittances between financial institutions.
What makes travel regulations particularly difficult for VASP is the different local transport of FATF guidelines in different jurisdictions around the world. Prior to the decision, Traveler Crypto.com was already accepted into the International Digital Asset Sharing Association and Global Digital Finance, two associations that strive to establish uniform standards and rules for the global digital real estate economy.
Traveler, which continues CipherTrace’s long-term work with open source travel policy information architecture, or Trisa, is specifically designed to provide VASP counterparties with due diligence required by FATF guidelines.
Thus, the VASP solution helps in exchanging sensitive personally identifiable information to verify cryptocurrency transactions and automatically identifies VASP conversion to VASPs as well as recipient VASPs. The tool also scans addresses associated with incoming cryptocurrency transactions and validates the original VASP. In addition, it issues digital ID certificates (VASP). All this forms the basis for an encrypted and mutually approved infrastructure for secure exchange of sensitive data.
Antonio Alvarez, Crypto.com’s head of compliance, told Cointelegraph why the company chose CipherTrace:
“For the travel tool to be useful, it requires broad acceptance, common standards and interoperability (along with other tools). CipherTrace Traveler software is based on the Trisa Alliance, which aims to address many issues, including interoperability. We are proud of being the first platform to implement the Traveler program, and we look forward to working with CipherTrace and our broader industry to standardize compliance practices. ”
In early 2020, John Jeffries, CFO of CipherTrace, said: “Enforcement of travel regulations is the biggest milestone and the biggest setback for cryptocurrencies. It has been and will maintain a level of maturity that will enable the industry to develop into an institutionally recognized asset class. […] It also poses a serious threat to many exchanges and poses potential privacy issues for users. Travel terms will be expensive even with open source software such as Trisa. ”