Lesa, Head of Content at Notabene, combines her deep B2B crypto and SaaS experience to deliver impactful insights for clients, fostering Notabene's reputation as a thought leader in the crypto regulatory tech space.
Starting a partial Travel Rule data transfer; completing at a later date
and much more.
1. Global VASPs can now differentiate multiple entities
What is multi-entity support?
Many VASPs (both Originating and Beneficiary) have entities in multiple jurisdictions. End customers and blockchain analytics services are unlikely to identify the subsidiary receiving the transaction. As threshold and PII requirements differ in various jurisdictions, providing multi-entity support is crucial for a best-in-class Travel Rule compliance solution.
Why is multi-entity support needed?
The Travel Rule requires VASPs to identify their counterparty and share the necessary Travel Rule data transfer. When a Counterparty VASP has multiple subsidiaries, it is unlikely that end customers and blockchain analytics services will identify the subsidiary that will receive the transaction.
For example, when Alice sends a transaction to Bob, she likely doesn’t know if his account is with Bitstamp Singapore, Bitstamp USA, or any other Bitstamp entity. She simply inputs his alphanumeric address and sends the transaction. A normal crypto transaction flow puts the onus on providers to determine which entity controls Bob’s address.
The Originator VASP must ensure that the Travel Rule data transfer is sent to the correct entity; and
The Beneficiary VASP has to receive and keep records of the Travel Rule data transfer within the relevant subsidiary.
Additionally, Travel Rule obligations vary across jurisdictions. Different subsidiaries within a group will be subject to various Travel Rule obligations. Therefore, VASP subsidiaries must set rules for their particular jurisdiction’s Travel Rule obligations.
How does Notabene support VASPs with multiple entities?
Notabene’s platform supports the creation of subsidiary VASPs connected to a parent company.
Each subsidiary will have its own profile
All subsidiaries of a VASP are connected to a parent company
Originator VASP and customer only see (and only need to identify) the parent company
The parent company forwards Travel Rule data transfers to the right subsidiaries
The parent company of the Beneficiary VASP will have access to the blockchain address book of all the subsidiaries, and each Beneficiary VASP can tie a blockchain address to a customer and the specific entity within the group. The Originator Customer (Alice) will only have to identify the parent Beneficiary VASP (Bitstamp), where the Travel Rule data transfer will be directed. Bitstamp will then route the transaction to the correct subsidiary.
2. Perform due diligence with industry-standard questionnaire
What is the Due Diligence Questionnaire?
The Due Diligence Questionnaire is the crypto industry’s adaptation of The Wolfsberg Questionnaire for financial institutions. The Wolfsberg Group produces AML, KYC, and CTF/CFT standards for finance. They’ve created 19 documents that establish rules for bank transparency.
Why is the Due Diligence Questionnaire needed?
The Wolfsberg Form is needed for VASPs to perform due diligence, as required by paragraph 197 of FATF’s updated Draft Guidance for a Risk-Based Approach to Virtual Assets and VASPs.
Request a completed questionnaire from another VASP within the Notabene network (providing they filled it out already.)
After this release, a VASP will be able to:
Request a questionnaire from another VASP within the Notabene network, even if they haven’t yet filled it out. This request will trigger an email directly to the VASP, inviting them to complete the questionnaire.
Share their questionnaire with a selected VASP.
3. Rich data points from VASPnet
What does the VASPnet x Notabene integration entail?
We've partnered with VASPnet to provide comprehensive regulatory information on over 250 new crypto companies.
This collaboration solves a crucial challenge presented by FATF’s Travel Rule requiring businesses to carry out due diligence on their counterparty VASPs before exchanging Travel Rule data transfers. This update also adds the “Responds to Travel Rule data transfers” section in the Network, indicating which counterparties Notabene clients can expect a response from.
Why is the VASPnet integration needed?
This in-product integration of VASPnet’s reference data allows VASPs to:
Access a larger number of VASPs to perform due diligence on in the Notabene Network
Leverage high-quality data directly sourced from regulators to make well-informed risk-based decisions
Manage AML/CFT risk with real-time, comprehensive, verifiable data
How to view and verify Counterparty VASP’s regulatory information before sending/accepting a Travel Rule data transfer.
4. Start a partial Travel Rule data transfer; complete itat a later date
We’ve added support to creating a partial Travel Rule data transfer. This allows Compliance Officers to begin a transaction, save it in the inbox, and add missing Beneficiary Customer information later.