CipherTrace Startup Unveils FATF Compliance Solution for Crypto Exchanges
Startup CipherTrace this Tuesday published open source software that will help wallet providers and cryptocurrency exchanges comply with the Financial Action Task Force rules anti-money laundering money (FATF) for the exchange of user data.
In June, the organization approved regulations for its member states, which recommended obliging its controlled virtual currency service providers (VASPs) to verify not only senders, but also recipients of transactions. Several representatives cryptocurrency industry stated that it would be impossible to comply with this order due to the peculiarities of the functioning of the technology.
CipherTrace, however, claim to be able to meet the challenge. with help VASP extended validation certificates. Such a certificate will be transferred from the sending exchange to the recipient exchange, and a trusted third party will be involved in their verification. The recipient exchange, in turn, will have to confirm that it accepted the transaction or reject it if it turns out that its participant is on the black list.
According to the submitted white paper, exchanges will have to make sure that they have a secure and reliable connection with each other. CipherTrace claims their solution is a lot like SSL certificates used to secure an encrypted connection between a user and a website..
IN present time Binance is already studying the CipherTrace code, but has not yet decided to install it. Several other exchanges are also believed to be involved in the process; their names were not disclosed.
The FATF recommendations have not yet been officially enforced by most of the participating countries, so exchanges that are trying to establish data exchange right now are acting proactively. Wherein The US Financial Crimes Enforcement Network (FinCEN) adopted a similar rule in its own interpretation back in May and, according to CipherTrace, is already actively taking action against American companies that violate it..
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