Crypto intelligence company Cipher Trace has announced the release of “Cipher Trace Traveler,” a new Travel Rule designed to assist virtual asset service providers (VASPs) such as exchanges, OTC trading desks and banks in becoming more compliant with financial regulators.
Cipher Trace Is Bringing About a New Travel Rule
Initial travel rules were suggested by the Financial Action Task Force (FATF), which work to ensure all monetary businesses out there are doing what the can to stop illicit activities such as money laundering and theft. In addition, these companies are required to ensure all customers are easily identifiable and that all their data and privacy is well protected.
Cipher Trace CEO Dave Jevans explained in an interview:
Cipher Trace Traveler is the first major milestone in the progressive development of commercial Travel Rule solutions building upon TRISA’s open-source foundation. Traveler leverages the TRISA VASP directory and TRISA certificate authority developed by TRISA into a solution that will be more secure and interoperable for use by exchanges and other financial institution clients.
Through the Traveler rule, VASPs can instantly verify wallets and see where transactions stem from. Granted the wallet and the exchange it’s connected to are part of the TRISA directory, the company knows that the owner is likely a legitimate person and additional steps are not necessary.
One of the big problems associated with crypto in the past has been crime. Events such as Mt. Gox and Coincheck – both of which occurred in Japan – have caused a massive dent in the legitimacy of the digital asset world, and solutions such as Traveler are designed to ensure that theft of this magnitude cannot occur again in the future.
Dave Jevans further stated:
This is a major step in overcoming previous barriers prohibiting VASPs from complying with current and pending Travel Rule laws. If all major exchanges, banks, and other financial institutions deployed Traveler, money laundering using cryptocurrencies could be dramatically reduced, as criminals would have fewer avenues enabling the obfuscation of stolen funds.
As time goes by, items like the Travel Rule are becoming more mainstream, and many exchanges – depending on where they’re located – cannot operate or engage in business practices without Travel Rule compliance. For example, exchanges in areas like Hong Kong, Singapore and Switzerland cannot function without obtaining a license that enforces the Travel Rule. Many think this is the best way to stop digital crime.
Making the Crypto World Safer
Jevans finishes with:
We can expect FinCEN in the U.S. to drop the threshold for cross-border transactions, implement rules pertaining to privacy coin transactions, and set a new deadline for VASPs to comply all quite early in 2021. The time for U.S. VASPs to sort out Travel Rule compliance is now.
Cipher Trace focuses on bringing virtual currency services and traditional banking services through top security protocols.