We talk with many compliance officers worldwide, and one of the number one questions we’ve received in the last few weeks is about the US Travel Rule WG. What is it, and will we support it? Most of the information that is available publicly comes from a talk given by Coinbase’s Jeff Horowitz at the recent GDF Travel Rule summit. Through conversations with companies involved, we’ve been able to piece together a reasonably good idea of what it is and also more importantly, what it isn’t. The US Travel Rule WG was designed to allow MSB’s licensed by the US regulator FinCEN to rapidly implement and comply with the US Travel Rule, which is defined in the Bank Secrecy Act.

While the crypto industry has made significant stride toward proposing technical solutions for the Travel Rule, crypto companies still face many challenges when it comes to implementation of the guidelines.

This report highlights a number of issues that regulators and representatives from the private sector have raised during implementation and asked for greater clarity and guidance on them. We have summarized these issues below. To shed more light on these issues and how to resolve, FATF is likely to introduce additional guidance by October 2020. 

In June 2019, the Financial Action Task Force (FATF) released a global regulatory framework for the crypto industry. One year later, on July 7th 2020, FATF released a report containing a 12-month review and assessment that measures implementation of these guidelines by jurisdictions and the private sector.

On July 7th 2020, FATF released a report containing a 12-month review and assessment, measuring implementation of these guidelines by jurisdictions and the private sector. The release of the report followed a virtual Plenary meeting held by the FATF on June 24th, 2020. In the review, the travel rule is highlighted as “the issue of most focus in terms of VASPs’ compliance with the revised FATF Standards.” What were the key findings of this review, and what does it mean for compliance teams in the crypto industry? 

In June 3, Malcom Wright, wrote an article about Travel Rule. There he described the “Travel Rule Discovery” problem, which basically means how to know which Travel Rule protocol the beneficiary VASP is using. In the article, the proposed solution is to build a centralized “Global List of VASP” (GLoV). We at Notabene think there is a better solution for this.

Today we are launching Notabene, a new crypto compliance platform for the financial industry. Notabene combines our expertise in financial markets and privacy-preserving systems to enable the industry to solve its most pressing challenge - regulatory compliance. Our platform enables businesses to comply with new financial reporting requirements more efficiently, broadly known as the Travel Rule. These critical requirements are part of the new worldwide regulatory framework for Virtual Assets Service Providers (VASPs) from FATF, the global anti-money laundering watchdog.

The new global Virtual Assets framework as well as the Travel Rule itself are the biggest opportunity crypto has had for crossing the chasm into the mainstream. Lack of regulatory clarity was always the primary stumbling block for crypto adoption and poor links with the traditional financial industry.