Participating virtual asset service providers (VASPs) are preparing to roll-out compliance with the Travel Rule for the Singapore market as early as April.
Notabene is excited to announce the launch of our Singapore Testnet, a testing environment created for a select group of our customers to perform Travel Rule transfers using the Notabene service. The participating companies consist of Crypto.com, Luno, Xfers, Onchain Custodian and Sparrow Tech Pte Ltd.
New anti-money laundering (AML) rules, commonly known as the “Travel Rule”, require crypto companies to share personal customer information with each other as part of a transaction. Jurisdictions around the world are implementing these rules as a prerequisite to granting operating licenses. Singapore’s MAS has been at the forefront of this. As companies rush to comply, they are faced with some practical challenges on how to trust counterparty exchanges and perform these data transfers securely and at scale. With an end-to-end Travel Rule platform, Notabene can help. With our rule-setting tools and VASP diligence service, compliance officers can now automate the exchange of Travel Rule data with trusted counterparties.
The Testnet is running for 6 weeks, starting the beginning of March 2021. Participant VASPs have already successfully completed a first phase of testing on March 5th, 2021. Pelle Braendgaard, CEO of Notabene, says:
Through this Testnet, participating VASPs are paving the path for the broader crypto industry. We are very happy to be working closely with their teams. They are setting a great example for companies faced with questions on how to best implement these new requirements while minimizing impact on day-to-day business. Their learnings will have a big impact ultimately on how the Travel Rule gets rolled out more widely.
The Testnet consists of simulations that mimic real-time scenarios between the participants, as well as with companies that are not part of this network. This allows VASPs to assess what new processes they need to introduce and how to deal with more complex scenarios.
As a trusted derivatives platform and member of the FinTech community, Sparrow aims to ensure we meet regulatory compliance standards. Notabene's Testnet has given us valuable insights into implementing the Travel Rule while helping us design robust internal processes to meet regulatory requirements,
affirms Kenneth Yeo, the CEO of Sparrow.
The Testnet allows participants to perform rigorous testing of different cases. This includes performing diligence on new VASPs and setting rules to automate secure transfers between trusted parties. The goal by the end of the Testnet is for companies to be ready to roll out the Travel Rule to their Singapore operations.
Antonio Alvarez, Chief Compliance Officer at Crypto.com said:
We are thrilled to be a part of testing and implementing cutting edge compliance technology that will resonate globally. We look forward to testing how this can be scaled up in our systems with fellow VASPs.
For many companies including those participating in our Testnet, the Travel Rule extends beyond the compliance department. They recognize that the Travel Rule adds a new layer of trust to crypto transactions by lowering counterparty risk. This presents an opportunity to launch new regulatory compliant products to their customers.
Aymeric Salley, Head of StraitsX at Xfers, says:
At Xfers and with our group of Singapore based partners, we are excited to take global leadership in providing the world's first Travel Rule compliant settlement network for Digital Assets, starting with our native token, the digital Singapore Dollar XSGD.
Apart from the established custody solution that we provide to our clients, Onchain Custodian is also actively working with the industry participants to fulfil Travel Rule requirements. As the industry grows rapidly, a secure, interoperable and efficient Travel Rule solution is vital for every participant including custodians,
says El Lee, Chief Operating Officer of Onchain Custodian.
For the participating VASPs, Singapore is a great market to roll-out the Travel Rule first. MAS’s clear guidance and exemption periods have provided a safe environment for companies to make a head start on compliance before global roll-out.
Sherry Goh, Country Manager of Singapore at Luno, says,
Operating in a well-regulated financial centre like Singapore has given us the opportunity to be forerunners in Travel Rule compliance. Industry cooperation is critical to its successful roll out here, and we are glad to have found like-minded partners to embark on this journey together. We look forward to seeing how the key learnings of this exercise could pave the way for an effective and consistent regulatory landscape for crypto players globally.
If you are interested in learning more about the Testnet or would like to implement the Travel Rule, please reach out to us at firstname.lastname@example.org.