Cryptocurrency exchange Bitfinex is preparing to test a new anti-money laundering (AML) tool on its platform.
The company announced Wednesday that it will test a new solution designed to comply with the “Travel Rule,” anti-money laundering and counter-terrorism financing regulations for financial institutions introduced by the Financial Action Task Force (FATF) in 2019.
Bitfinex has teamed up with compliance startup Notabene to market its software-as-a-service to identify digital asset accounts, track cross-border transactions, and fulfill other public obligations of Virtual Asset Service Providers (VASPs). The integration is expected to enable the company to maintain privacy when collecting and managing travel policy data.
According to the announcement, the solution allows Bitfinex to exchange, send and receive counterparty information along with blockchain transactions to any counterparties using the same infrastructure. Bitfinex subsidiary Tether, which operates the world’s largest cryptocurrency stack, Tether (USDT), has also used the Notabenes solution.
Peter Farak, Bitfinex’s Chief Compliance Officer, said Bitfinex has “always played a leading role in meeting new global regulatory requirements.”
Notabene CEO Pelle Brundgaard told Cointelegraph that the company launched the Travel Rule solution in August 2020. The service currently handles transactions between at least 50 different exchanges, including Paxful, Luno, Bitso, OnChain Custodian, and others.
Notabene has conducted tests in several jurisdictions, including a pilot trial with the Financial Services Regulatory Authority of the Abu Dhabi Global Market in early October.
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Bründgaard added that travel compliance is growing rapidly each quarter, and the company expects large VASPs to be met by the first or second quarter of 2022.
Since the issuance of the cryptocurrency travel rule over two years ago, the Financial Action Task Force has continued to work on the structure to improve it and cater to the growing cryptocurrency industry. The Financial Action Task Force (FATF) has confirmed that global regulators are in a rush to implement the travel rule as part of the updated VASP guidelines on October 28.
In February, the agency released a scoping document to adapt the guide to travel guidelines for stablecoin and peer-to-peer cryptocurrency transactions.