Glossary
Closed Network
In the context of Travel Rule compliance, a closed network mandates that VASPs undergo a rigorous onboarding process prior to joining the network. Closed networks operate on exclusive protocols, which means they don't usually work with other systems. In these networks, VASPs can only exchange Travel Rule information with others in the same network. Yet, regardless of the network type, the FATF requires all VASPs to perform detailed due diligence and risk evaluations on their counterparts, as detailed in paragraph 30 of the FATF's report, “Virtual Assets: Targeted Update on Implementation of the FATF Standards.”
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