May 5, 2021

Crypto companies tested automated Travel Rule transfers using Notabene

We’re excited to share that a select group of our Singaporean customers, Luno, Crypto.com, and Xfers, have successfully completed the second phase of Notabene’s Travel Rule testnet.

This makes them one of the first VASPs ready to roll out full Travel Rule compliance at scale on their platforms.

In various real-world scenarios, participants exchanged automated Travel Rule transfers that allowed instant counterparty VASP verification and Beneficiary’s VASP blockchain address confirmation. This phase also demonstrated the Notabene’s protocol-agnostic approach by using both TRNow, Notabene’s in-house solution, and TRP, an open-source, industry-led protocol, as messaging channels.

Phase 1 - Counterparty verification and secure data exchange

In the first phase, companies exchanged Travel Rule transfers using Notabene’s manual solution. This was an excellent opportunity for participants to tackle practical challenges in verifying a counterparty and securely performing data transfers. 

As a result, participants developed the know-how and exchanged best-practices to improve their internal transaction flows to address Travel Rule requirements. 

Phase 1 of the testnet also led to the creation of a testnet working group. Members of compliance, product, and dev teams from the participating VASPs now meet bi-weekly to collaborate on various challenges and agree on best practices for solutions.    

Phase 2 - Automating the Travel Rule flow full-scale compliance   

The goal of the second phase was to test: 

  • The automation and scalability of Travel Rule compliance processes using Notabene’s API  
  • The instant counterparty VASP verification using client-defined whitelists
  • Increased customer data protection through blockchain address confirmation for beneficiary VASPs
  • The ability to connect, regardless of protocol, with any VASP by using TRNow and TRP 

Automatically generated Travel Rule transfers

For this exercise, participants exchanged automatically generated and verified Travel Rule transfers. With simple API integration, data transfers are created seamlessly by collecting Beneficiary’s and Originator’s information from VASPs’ internal systems, the moment a user initiates a transaction. 

Did you know? Notabene’s pre-built user interface components instantly identify the wallet type and counterparties involved in a transaction and help collect any missing data from users. This feature was not part of the testnet but is a core part of Notabene’s Travel Rule offering. Learn more here.

Singapore testnet Phase 2

Instant counterparty VASP verification

Notabene’s “Trust this company” functionality enabled testnet participants to easily verify and whitelist counterparties. This way, every transfer sent to a trusted VASP is automatically approved, allowing compliance officers to focus only on high-risk transactions.

Did you know? Notabene built a VASP directory that allows any company to create a public profile for free. Create your profile today and reduce the burden of business-to-business verification, a necessary but time intensive step to ensure the secure exchange of Travel Rule information.

Beneficiary VASP’s blockchain address confirmation

To prevent customers’ personal data from being sent to the wrong VASP, Notabene adds an extra layer of trust ensuring that a customers’ data always reaches the intended counterparty. Before a data exchange occurred, participants receiving a transfer were able to automatically confirm that the Beneficiary’s blockchain address belongs to them. 

Sending Travel Rule transfers to VASPs outside of the Notabene network

Notabene enables its customers to work with any VASP, regardless of protocol. The testnet allowed companies to send and receive transfers from a set of mock/simulated counterparties that lacked any Travel Rule solution. With much of the industry still early in its Travel Rule implementation, this capability is critical while different jurisdictions are developing at various speeds. 

Participating VASPs also seamlessly exchanged customer data over an external protocol, TRP. As the proliferation and adoption of various Travel Rule protocols grows, Notabene will be adding them to its platform, allowing its customers to reach the most extensive number of counterparties possible.    

Meeting FATF requirements without hindering business growth

These three scenarios were critical to test the implementation of the FATF and MAS requirements in a real-world business environment. 

This evaluation allowed our customers to better understand what adjustments they need to make within their compliance and transaction flows to roll out a fully scalable Travel Rule solution without hindering business growth.

This is just the beginning

The implementation of the Travel Rule doesn’t happen overnight and will impact user experience, product, and compliance across the entire transaction flow. This is why it’s important to start testing and assessing its impact on existing systems as soon as possible. We’re committed to constantly supporting our customers along this journey from start  through post full-deployment. Our bi-weekly meetings and deep-dive sessions will continue, and we hope the group of participants will only grow as we launch the next editions of the testnet.

Call for submission!

If you constantly hear about the Travel Rule but aren’t sure where to start, we’re here to help! We’re currently inviting VASPs interested in participating in the next edition of a global, cross-jurisdiction Travel Rule testnet. Apply here!


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