CipherTrace launches "Travel Rule" in response to FATF to maintain user data privacy

Translator: Play the coin family ElaineHu

Blockchain tracking company CipherTrace will launch a solution designed to help cryptocurrency companies comply with the strict new regulations recently recommended by the Financial Action Task Force (FATF).

CipherTrace is working with Shyft, a company that develops blockchain-based identity and authentication platforms. The company said it plans to comply with FATF's "Travel Rule" while maintaining user privacy.

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Specifically, according to a statement on Tuesday, these companies will establish an “know your customer” (KYC) and “anti-money laundering” (AML) ecosystem, “in this system, exchanges that participate in transactions can be safely transferred. Proof of knowledge without the need to disclose personally identifiable information."

The FATF announced at the end of June that it had finalized its recommendations on cryptocurrency regulation for its 37 member states.

The new standard includes a controversial requirement that “virtual asset service providers” (including cryptographic exchanges) must pass customer information to each other when transferring funds between companies. The FATF gives Member States 12 months to pass the guidelines and will review them in June 2020.

According to reports, currently, cryptocurrency exchanges lack a compatible way to share KYC data or warn other companies of suspicious activity.

To address this shortcoming, CipherTrace and Shyft will launch a pilot project to develop a "shared smart contract and encrypted access control" solution that allows cryptocurrency exchanges to manage access to users' private information.

The ultimate goal is to make KYC and AML "faster, more efficient, and more open" while maintaining "high privacy." These companies stated that the solution would only disclose identity information if “the legal authority mandated it”.

CipherTrace CEO Dave Jevans said:

“With the privacy mechanism of encryption control, it is possible to disclose the source of funds anonymously for legitimate purposes (such as criminal or terrorism investigations and “anti-money laundering” compliance). This is CipherTrace's efforts for the future growth of global cryptocurrency. The direction. We believe that there are technical and regulatory solutions that protect users' data privacy while ensuring security and compliance."

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