Netki Updates TransactID Solution For FATF’s New Crypto ‘Travel Rule’br>
Remote identity verification and compliance provider Netki has updated its TransactID solution to ensure compliance with the Financial Action Task Force (FATF) “Travel Rule.”
In June of this year, the FATF adopted new guidelines that require crypto exchanges to share same user data as banks. The guidelines made it clear that crypto businesses would have to gather, hold, and transfer information about the identity of the originator and beneficiary involved in any transaction. Regulatory authorities, including the US FinCEN and Switzerland’s FINMA, have already begun to extend Travel Rule requirements.
In a press release, Netki said that its updated TransactID solution, which was launched in 2016, uses open-source standards to enable a secure, encrypted, peer-to-peer exchange of identity information between parties prior to transactions, allowing Virtual Asset Providers (VASP) to capture and transfer the information required by the “Travel Rule,” and stay in compliance with FATF.
Justin Newton, CEO and co-founder of Netki, said that they’ve developed a way to maintain compliance without disrupting the business, adding that TransactID is a comprehensive solution that doesn’t require a huge investment, and adds zero transaction costs.
“VASPs are concerned, and rightly so, that FATF regulations threaten the very principles of privacy and distributed ledgers on which cryptocurrencies are founded,” said Newton. “TransactID enables them to comply with regulatory disclosure requirements without interfering with the blockchains or threatening the fungibility of their underlying tokens.”
According to Netki, the solution builds on the bitcoin Improvement Protocol BIP 75, a peer-to-peer protocol, based on open standards, which is available for anyone to use and is compatible with both custodial and non-custodial wallets. It also uses X.509 certificates to exchange ID information between transacting parties and their VASPs.
“In all likelihood, the Travel Rule is just the first regulation that they will encounter,” said Newton. “Sanctions and OFAC compliance will follow in the future, and our product can easily accommodate it.”