Bitfinex, a cryptocurrency exchange, is planning to put a new anti-money laundering (AML) technology to the test on its platform.
The company stated on Wednesday that it will be beta testing a new solution aimed to help financial institutions comply with the “Travel Rule,” a new anti-money laundering and counter-terrorist financing legislation adopted by the Financial Action Task Force (FATF) in 2019.
Bitfinex teamed up with Notabene, a compliance company, to implement its software-as-a-service solution for identifying digital asset accounts, tracking cross-border transactions, and complying with other wide duties of virtual asset service providers (VASP). The connection is designed to allow the company to maintain privacy while collecting and managing data pertaining to the Travel Rule.
The solution, according to the statement, allows Bitfinex to communicate, transmit, and receive counterparty information, as well as blockchain transactions, with any counterparties that use the same infrastructure. Tether, Bitfinex’s sibling firm that runs the world’s largest stablecoin, Tether (USDT), has started using the Notabenes technology as well.
Bitfinex has “always taken a pioneering role in satisfying new worldwide regulatory standards,” according to Peter Warrack, chief compliance officer.
Bitfinex has pioneering role in satisfying new worldwide regulatory standards
Pelle Brndgaard, CEO of Notabene, indicated that the company’s Travel Rule solution will be available in August 2020. At least 50 different exchanges are presently using the service, including Paxful, Luno, Bitso, OnChain Custodian, and others.
Notabene has been conducting trials in a number of jurisdictions. Including an early October pilot with the Financial Services Regulatory Authority of Abu Dhabi Global Market.
“With this new Guidance, FATF increases the urgency while also recognising the real-world challenges. That VASPs and Travel Rule service providers like us have brought to their attention over the previous year. They’re now advising authorities to be flexible during the initial deployment,” said Brndgaard.
The business anticipates big VASPs to comply by the first or second quarter of 2022, according to Brndgaard.
The FATF has been working on the crypto Travel Rule for more than two years. Trying to strengthen it and adapt it to the booming bitcoin business. The authority published a review paper in February to update its Travel Rule advice. In order to include stablecoins and crypto peer-to-peer transactions.