Notabene, the crypto pre-transaction decision-making platform, has announced the launch of SAFE Implementation phases for a fast and straightforward rollout of the Travel Rule. The new launch is the latest addition to Notabene’s comprehensive compliance solution and underscores our continued commitment to enabling secure, trusted crypto transactions.

Crypto businesses or VASPs (Virtual Asset Service Providers) are required to comply with the Financial Action Task Force’s (FATF) Travel Rule, which mandates that certain identifiable information be shared between institutions before crypto transactions over a certain threshold. While compliance with the Travel Rule is crucial to operating in the crypto industry, many companies have faced challenges in implementing it effectively, largely due to the unclear nature of the regulation and the differences in timelines and requirements for jurisdictional rollout.

In Notabene's 2023 State of Crypto Travel Rule Compliance Report, legal uncertainty was cited by nearly a quarter (22%) of respondents as the main hindrance to compliance, which has caused the industry's progress to stall. As the rollout of FATF’s Travel Rule has been inconsistent globally, compliance officers are facing the difficult decision of when and how to implement travel rule requirements with minimal impact on transaction flow. This is why Notabene is offering a phased implementation process that simplifies operational risk and provides analytics to guide you through your Travel Rule rollout.  

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What is SAFE implementation?

SAFE Implementation enables customers to meet regulatory guidelines and evolve their own risk-based approach and needs over time - with the first phase requiring less than a week with only minimal technical integration. Furthermore, as part of the implementation phases, Notabene's SafeTransact platform provides industry-unique support for multiple legal entities. This makes it easier for you to expand seamlessly into multiple jurisdictions without worrying about complex legal and compliance issues.

These implementation phases demonstrate how the Travel Rule would affect your transaction flow today and what steps to take toward full compliance. Phasing Travel Rule rollout in this way allows companies to connect their internal systems before sending real transactions, with only minor technical changes needed, and gradually manage when to start sending and responding to transactions based on your own data. Working with the Notabene team, you can take a step-by-step approach to Travel Rule compliance or go straight to full compliance, depending on your jurisdictional requirements.

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How to use SAFE Implementation?

Each phase comprises required and optional actions, which compliance and technical teams can prioritize depending on their use case and timeline. Once you have completed the required tasks in each phase, you will progress to the next stage.

Our phased Travel Rule rollout plan has been thoroughly designed and optimized to ensure easy and fast integration. This means your team can be up and running quickly, with minimal effort. You can save additional resources and streamline your operations by leveraging our existing integrations with leading custodians, MPC wallets, and blockchain analytics providers. 

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Get started with Travel Rule today

If you're just getting to grips with Travel Rule compliance, our free SafeTransact-Rise plan is the best place to start. You can start using our platform without any integration required and begin enjoying the benefits of our advanced compliance features. With SafeTransact-Rise, you can take the first step towards ensuring that your business fully complies with Travel Rule regulations without any upfront costs or commitments.

The SAFE implementation phases for Travel Rule are just one of many features Notabene offers to help customers comply with regulations. We understand that regulatory compliance is a complex and ever-evolving issue, and we are committed to providing our customers with the tools and expertise they need to stay ahead of the game. Our team of experts is always available to answer any questions about regulatory compliance, and we are constantly updating our solutions to ensure that they meet the latest regulatory requirements.

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NayaOne welcomes Notabene to the NayaOne Marketplace, making Notabene's pre-transaction decision-making platform accessible to NayaOne’s customers. This will benefit financial institutions that are seeking to improve their ability to automate real-time decisions, comply with the Travel Rule, perform sanction-screening of counterparties, and more.

Notabene's solution helps financial institutions and virtual asset service providers (VASPs) comply with regulatory requirements related to cryptocurrency transactions. Banks that offer cryptocurrency-related services, such as buying, selling, or exchanging virtual assets, are considered VASPs and are subject to regulatory guidelines set by the Financial Action Task Force (FATF) and other regulatory bodies. Notabene's platform can help VASPs, including banks, meet these guidelines by providing them with features such as:

1. Compliant transactions: Notabene provides a unified transaction risk management platform for complying in real-time with Travel Rule, self-hosted wallet requirements, and counterparty sanctions Screening.
2. Counterparty due diligence: SafeTransact provides customers with data and tools to perform ongoing due diligence and risk assessment on counterparty financial institutions or VASPs.
3. Intelligent Insights: The Notabene platform brings together transactional-level data on counterparties and transactions to enable fully informed compliance decisions and transactions with only trusted counterparties.

By using Notabene's solutions, banks can ensure compliance with regulatory requirements related to cryptocurrency transactions and mitigate the risk of potential legal and financial fines. Additionally, a compliance platform like Notabene can help banks streamline their compliance efforts, reduce costs, and improve transparency and security in the cryptocurrency industry.

Lauren Nichols, Head of Business Development at Notabene, “We are pleased to announce our partnership with NayaOne. As the go-to partner for Travel Rule compliance, we look forward to working alongside them to help financial institutions understand the complex world of crypto risk, enabling more people to participate safely and confidently. NayaOne's innovative approach is also noteworthy; by introducing the latest tools in an easy and seamless way, they make it easier for institutions to stay on top of regulatory requirements through its Digital Transformation Platform.”

Oli Platt, Product and Marketplace Manager at NayaOne,  “It's great to see Notabene available on the NayaOne Marketplace. Their Travel Rule compliance solution will help financial institutions understand the complex world of crypto risk, enabling more people and businesses to transact safely and confidently with crypto assets. This will support digital assets and RegTech use cases for our clients!”

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About Notabene

Notabene is crypto’s only pre-transaction decision-making platform, enabling customers to identify and stop high-risk activity before it occurs.  

Notabene's SafeTransact platform helps financial institutions and crypto businesses unlock their full potential in the digital economy. With a focus on security, privacy, and end-user experience, Notabene customers can use our multi-source data and software to automate real-time decision-making, perform counterparty sanctions screening, identify self-hosted wallets, and complete the smooth rollout of Travel Rule compliance, all in line with global and local regulations.

About NayaOne 

NayaOne revolutionises innovation in financial services. We provide banks with a single point of access to hundreds of fintechs and datasets, through our Digital Sandbox and Fintech-as-a Service offering. Regulated firms are able to discover, build, evaluate and scale with fintechs in a matter of weeks instead of months.

Fireblocks and Notabene join forces to provide the first fully integrated solution for processing Travel Rule compliant transactions.

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‍NEW YORK – May 4, 2023 – Fireblocks, an easy-to-use platform to create innovative products on the blockchain and manage day-to-day crypto operations, announced today that it has partnered with Notabene by integrating its pre-transaction decision-making solution to the Fireblocks platform, creating a seamless experience for its institutional customers looking to comply with their local crypto Travel Rule requirements. 

In 2019, the Financial Action Task Force (FATF) introduced the Travel Rule. This rule requires virtual asset service providers (VASPs) to collaborate in identifying each other's customers in a transaction, to avoid financial crime and implement effective sanctions screening programs. Fireblocks' integration with Notabene seamlessly meets the needs of institutions looking for a solution that allows automated management and compliance of the Travel Rule's assorted requirements, regardless of variations across global jurisdictions. With this partnership, institutions can now perform real-time compliance checks before settlement, marking the first time this has been possible. The fully integrated solution eliminates much of the technical and operational complexity that previously hindered the implementation of the Travel Rule, empowering VASPs to achieve compliance and roll out the Travel Rule in a matter of days.

According to a recent FATF survey, 34 jurisdictions have passed relevant laws introducing the Travel Rule, and 25 are in the process of passing legislation. Examples of jurisdictions where the Travel Rule is currently enforced includes Switzerland, Singapore, Germany, Japan, Dubai, and the United States, with the United Kingdom and Hong Kong set to enforce the rule this year. For an updated list of jurisdictional requirements and insights on the industry's adoption of the Travel Rule, please visit Notabene’s newly released State of Crypto Travel Rule Compliance Report.

“We are excited to partner with Fireblocks to offer the first fully integrated solution  between custody and the Travel Rule,'' said Pelle Braendgaard, CEO, Notabene. “The integration ensures that all transactions going to and from Fireblocks are compliant by tying compliance decisions to settlement. With Notabene, users can identify and stop high-risk activity such as laundering of proceeds from exchange or DeFi hacks before it settles with Fireblocks.”

Following last year’s turbulent events in the crypto industry, there is an urgency between VASPs, their customers, regulators, and banking partners to rebuild trust. As regulations continue to evolve and become more stringent, there is a pressing need for solutions ensuring institutions are compliant. 

Together with partners Chainalysis, Elliptic, and now Notabene, Fireblocks provides the simplest and most streamlined way for institutions to meet these evolving digital asset regulatory requirements and address industry threats through its Compliance Solutions Suite. 

“As the world embraces the rapid advancement of Web3 and digital assets, we need to ensure our solutions strike a balance between regulatory compliance and the inherent agility of this fast-paced technology sector. By partnering with industry-leading digital asset compliance solutions like Notabene, we are empowering our customers to navigate complex compliance requirements across multiple jurisdictions with ease,” said Jason P. Allegrante, Chief Legal & Compliance Officer, Fireblocks. “We are proud to provide our customers with an all-in-one suite for remaining compliant with ease, allowing them to focus on what matters most – innovation and growth.”

Fireblocks’ Compliance Solutions Suite eliminates the complexity for institutions to remain compliant by enabling them with: 

1. Automated Screening – Allows institutions to integrate compliance checks into every transaction, meaning each transaction is automatically screened based on configured compliance rules and provider data which prevents teams from sending and/or receiving risky transactions. 
2. Compliance Policy Rules – Enables institutions to easily configure compliance policy rules based on risk scores generated by compliance providers. 
3. Compliance Dashboard – Provides a single dashboard for all compliance operations, allowing easy management of policy rules for each compliance solution provider. 

To learn more about Fireblocks’ partnership with Notabene and how the integration can help your company meet its FATF Travel Rule standards, click here.

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About Fireblocks

Fireblocks is an enterprise-grade platform delivering a secure infrastructure for moving, storing, and issuing digital assets. Fireblocks enables exchanges, lending desks, custodians, banks, trading desks, and hedge funds to securely scale digital asset operations through the Fireblocks Network and MPC-based Wallet Infrastructure. Fireblocks serves thousands of financial institutions, has secured the transfer of over $4 trillion in digital assets, and has a unique insurance policy that covers assets in storage and transit. Some of the biggest trading desks have switched to Fireblocks because it's the only solution that CISOs and Ops Teams both love. For more information, please visit www.fireblocks.com.

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About Notabene

Notabene is crypto’s only pre-transaction decision-making platform, enabling customers to identify and stop high-risk activity before it occurs.  

Notabene's SafeTransact platform helps financial institutions and crypto businesses unlock their full potential in the digital economy. With a focus on security, privacy, and end-user experience, Notabene customers can use our multi-source data and software to automate real-time decision-making, perform counterparty sanctions screening, identify self-hosted wallets, and complete the smooth rollout of Travel Rule compliance, all in line with global and local regulations.

Notabene has been SOC-2 security certified since 2021. Over 85 companies leverage our software to manage real-time regulatory and counterparty risk in virtual asset transactions, including Luno, Crypto.com, and Bitstamp. Headquartered in New York, Notabene is a global company with a presence in Switzerland, Singapore, Germany, and the United Kingdom. 

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A Comparative Analysis of the EU's Transfer of Funds regulation with current industry standards on Travel Rule

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Today marks the achievement of a major milestone in European crypto regulation: the European Parliament approved the Regulation on Markets in Crypto-Assets (MiCA) and the revision of the Regulation on information accompanying transfers of funds (TFR, or Transfer of Funds Regulation). 

The approval of MiCA is a landmark that has the potential to set standards for crypto regulation globally. One of its main goals is to provide clarity and legal certainty for the crypto industry, which has been operating in a regulatory gray area for many years. MiCA establishes a level playing field for all European crypto-asset service providers (CASPs) and boosts consumers’ protection when using crypto-assets. It does so by introducing new rules for issuers of crypto-assets, CASPs, and trading platforms. It will also establish a new regulatory regime for stablecoins, which have become increasingly popular in recent years due to their stability and ease of use for payments. 

Despite the press attention on MiCA, the TFR is a critical piece of legislation that will harmonize crypto Travel Rule requirements across Europe and fundamentally change how we transact in crypto. In June 2019, the FATF published its Guidance for a Risk-Based Approach to Virtual Assets (VAs) and Virtual Asset Service Providers (VASPs), extending anti-money laundering/countering the financing of terrorism (AML/CFT) obligations to cover VAs and VASPs. This directive included the Travel Rule, which obliges VASPs that exchange, hold, safe keep, convert, and sell virtual assets to obtain, hold, and transmit required originator and beneficiary information immediately and securely during VA transfers. 

Since FATF introduced the crypto Travel Rule, national regulators have been working on transposing these requirements to their local frameworks, and significant progress has been achieved globally. With the introduction of the TFR, the EU follows in these footsteps and introduces Travel Rule obligations for European CASPs. 

Notabene reports on the progress achieved in the implementation of the Travel Rule through an annual global crypto Travel Rule compliance report. The 2023 edition will be available soon, and today we share how the TFR compares with industry benchmarks using fresh findings from our report. 

The revised Transfer of Funds Regulation

The European Commission made a significant move to combat money laundering and terrorism financing with an ambitious package of legislative proposals presented on July 20, 2021. The package aims to strengthen the EU's anti-money laundering and countering terrorism financing (AML/CFT) rules.

The package includes various measures to improve the EU's AML/CTF framework, including the revision of the Transfer of Funds Regulation to make it possible to trace transfers of crypto-assets by imposing Travel Rule requirements on CASPs. 

As mentioned above, the revision of the Transfer of Funds Regulation was finally approved by the European Parliament plenary today (April 20, 2023). However, the EU’s AML/CTF legislative package is not yet finalized. Notably, the legislative process of the new proposed regulation on AML/CTF (AMLR) is still ongoing and is expected to impact the requirements applicable to transactions with self-hosted wallets. 

For now, let’s dive into the TFR and how it compares to global industry standards on the crypto Travel Rule. 

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Five key TFR takeaways: EU vs. Global Industry Standards

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1. Travel Rule comes into effect for all EU VASPs on December 30, 2024

The Transfer of Funds Regulation will start applying on December 30, 2024, 18 months after the regulation enters into force.

According to Notabene’s 2023 State of Travel Rule Report, the large majority (84%) of respondents are currently complying or intend to comply with the Travel Rule by Q4 2023. In the United Kingdom, Travel Rule will be enforced starting September 2023, and several other crypto hubs are enforcing Travel Rule compliance already. This creates a considerable gap between the EU’s and third-countries timelines for Travel Rule implementation, which may prevent the industry from overcoming the Sunrise Issue. To stay competitive and continue to be able to transact with counterparties outside the EU, CASPs will need to roll out Travel Rule ahead of the TFR deadline. 

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Notabene’ study also reveals that Europe's adoption is delayed compared to the rest of the market. In particular, EMEA is the region with the highest percentage of VASPs planning to be compliant after Q4 2023. This may have reflected a lack of regulatory urgency, with many EU VASPs awaiting the implementation of Travel Rule requirements through the revised Transfer of Funds Regulation which had just occurred.

2. Zero Exceptions: Travel Rule obligations apply to all transactions, regardless of amount or location - inside or outside the Union.

EU CASPs will be required to comply with Travel Rule obligations in every transaction, regardless of its amount. No de minimis threshold applies, and there is no simplification of requirements for transactions within the Union. It is also worth noting that the scope of originator and beneficiary information that the originator CASP is required to share also does not vary depending on the transaction amount - the same scope, defined in Article 14 (1) and (2), is required for every transaction.

Recital 27 justifies the policy option by citing the “inherent borderless nature and global reach of transfers of cryptoassets and of the provision of crypto-asset services,” and being “in line with the FATF requirement to treat all transfers of crypto-assets as cross-border,”  which invalidates any distinction on the scope of obligations when transacting within and outside the Union. [1]

As reported in our 2023 global crypto Travel Rule compliance report, the approach taken by the TFR (imposing the same information transmission obligations regardless of the transaction amount) contrasts with the option taken by several other jurisdictions, notably Singapore, Germany, Hong Kong, and the United Kingdom, which allow a more limited scope of information to be shared below a certain threshold. 

3. First-party transactions with self-hosted wallets over 1,000 euros require wallet ownership verification.

In line with FATF recommendations, transactions with self-hosted wallers fall within the scope of the revised Transfer of Funds Regulation [2]. 

When transacting with self-hosted wallets, European CASPs must collect the required originator and beneficiary information and comply with the following additional wallet verification obligations for transactions exceeding 1,000 Euros:

1. When sending a transfer exceeding EUR 1,000 to a self-hosted wallet, the originator VASP is required to verify if that wallet is owned or controlled by the originator customer;
2. When receiving a transfer exceeding EUR 1,000 from a self-hosted wallet, the beneficiary VASP must verify that the beneficiary customer owns or controls the originating wallet. 

​​This means wallet ownership verification requirements apply to first-party transactions to/from self-hosted wallets exceeding EUR 1,000. [3]

Our 2023 State of Travel Rule Compliance Report revealed that the majority of surveyed VASPs already enforce restrictions when transacting with self-hosted wallets. Additionally, just over a third of companies (34.3%) only allow first-party transactions with self-hosted wallets, provided the customer can demonstrate ownership of the wallet address, which aligns with the approach taken by the TFR. 

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Going forward, VASPs will require a tool that allows them to determine if the transaction is with a self-hosted wallet and swiftly verify ownership before proceeding.

Notabene’s self-hosted wallet identification tool pinpoints the jurisdictional requirements of each transaction. It collects counterparty customer data from your withdrawal screen, creating an archive for sanctions compliance, record keeping, and Suspicious Activity Reports.

4. Due diligence measures for non-EU entities must adhere to correspondent banking standards.

In its Updated Guidance for VAs and VASPs (October 2021), FATF makes it clear that counterparty due diligence for the purposes of engaging in Travel Rule flows is distinct from the due diligence required to establish correspondent banking relationships [4]:

The nature of CASPs' relationships for transacting and sharing Travel Rule information is distinct from correspondent banking relationships and, hence, could justify a different - and more limited - scope of counterparty due diligence obligations to apply. 

However, the revised Transfer of Funds Regulation goes in a different direction: citing the “ongoing and repetitive” nature of the relationships between domestic CASPs and foreign VASPs for the purpose of transacting, the TFR deems these relationships as a type of correspondent relationship subject to enhanced due diligence measures. 

The measures CASPs are required to apply will be further specified in guidance issued by the European Banking Authority. Clear and adequate regulatory guidance on counterparty due diligence obligations will be key to enabling European CASPs to comply adequately. 

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Notabene’s  2023 State of Crypto Travel Rule Compliance Report shows 52% of respondents send Travel Rule transfers to all VASPs without applying any criteria or counterparty due diligence process. This indicates that perhaps counterparty due diligence is a component of Travel Rule compliance that VASPs still struggle to grasp fully. Local laws and regulations are often vague or silent on this topic, although it is covered at length in the FATF Guidance. The upcoming guidance by the European Banking Authority should set expectations as to what counterparty due diligence measures are required for the purposes of transacting and engaging in Travel Rule flows. It will also be relevant to specify cases where VASPs may be exempt from carrying out due diligence (e.g., relying on the uniform requirements and supervision applied in the jurisdiction or region) or where simplified due diligence measures are permissible. [5]

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5. CASPs are required to fulfill Travel Rule obligations prior to transacting

Notabene welcomes the clarification provided by the TFR that Travel Rule compliance needs to be performed pre-transaction. This is particularly important given the specific characteristics of virtual asset transactions: settlement is immediate and irreversible; hence, only pre-transaction actions can effectively mitigate risk. 

In line with this, Notabene is a pre-transaction decision-making platform offering a secure, holistic view of crypto transactions that enables CASPs to identify and stop high-risk activity before it occurs on the blockchain. 

According to the revised TFR, originator CASPs are required to transmit information to the beneficiary CASP before sending the corresponding crypto transaction. In turn, Beneficiary CASPs need to ensure that the required information was received before making funds available to the end customer. [6]

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According to Notabene’s 2023 State of Crypto Travel Rule Report,  although the industry is making significant progress in Travel Rule adoption, a notable discrepancy exists between VASPs’ claims of compliance and their fulfillment of pre-transaction obligations.

37.5% of companies reporting to be Travel Rule-compliant fulfill requirements post-transaction, which does not align with the TFR’s pre-transaction requirements or the FATF standards. Providing European CASPs with regulatory clarity in that Travel Rule is a pre-transaction requirement is a fundamental step to drive compliance in the right direction. 

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Next steps:

The revised Transfer of Funds Regulation will be supplemented by guidelines issued by the European Banking Authority on different aspects, for example:

• The factors to be taken into account by CASPs when entering into business relationships or carrying out transactions in crypto-assets and enhanced due diligence measures that obliged entities shall consider applying to mitigate higher risks when identified, including the adoption of appropriate procedures to detect the origin or destination of crypto assets;
• The criteria and means for identification and verification of the identity of the originator or beneficiary of a transfer made to or from a self-hosted address, in particular through reliance on third parties, taking into account the latest technological developments. 

NEW YORK, SINGAPORE, LONDON - April 25, 2023 -- Notabene has published its second comprehensive State of Crypto Travel Rule Compliance Report, which provides insightful results from their 2023 global Travel Rule compliance survey. This report follows the successful inaugural report, which provided the industry's first-ever comprehensive analysis of Travel Rule compliance.

"This year's report highlights that Travel Rule compliance is becoming increasingly global, with nearly a quarter (23%) of the surveyed companies needing to comply with Travel Rule requirements in more than one jurisdiction. These findings suggest that the Travel Rule is becoming more global in nature, underscoring the need for a solution to the common cross-border challenges posed by the Travel Rule," says CEO Pelle Braendgaard.

The State of Travel Rule report includes survey results from financial institutions and crypto companies worldwide on how prepared they are for upcoming regulatory deadlines. Sixty-nine companies completed the survey, representing broad global coverage.

The report includes real-world feedback on differences in Travel Rule adoption across jurisdictions, approaches to implementation, components of compliance, and summarizes adoption pitfalls. Key findings show that 84% of companies are already complying or plan to by the end of 2023, and 75% of respondents impose some restrictions on transactions with self-hosted wallets. The report also found that of those who comply, 37.5% perform the travel rule post-transaction, not fulfilling today’s FATF requirements.

"Our global and diverse respondents have reinforced the global nature and the various levels of Travel Rule compliance." says Lana Schwartzman, Head of Regulatory and Compliance at Notabene. "VASPs are asking for a unified and interoperable global approach for reaching their counterparties and transmitting Travel Rule messages. As a result, regulators must work together with industry to develop a unified approach to Travel Rule compliance that addresses the needs of the entire industry. We are already seeing this in the EU and UK and hope other regions will follow."

This year's report includes a comprehensive illustration of the current global state of Travel Rule adoption, showcasing key information regarding jurisdictional enforcement, including information on the enforcement status of each jurisdiction, as well as the threshold amount and self-hosted wallet obligations. This information is crucial for businesses seeking to comply with the Travel Rule.

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About Notabene:

Notabene is crypto’s only pre-transaction decision making platform. We enable customers to identify and stop high-risk activity before it occurs.  

Notabene's SafeTransact platform helps financial institutions and crypto businesses unlock their full potential in the digital economy. With a focus on security, privacy, and end-user experience, Notabene customers can  use our multi-source data and software to automate real-time decision-making, perform counterparty sanctions screening, identify self-hosted wallets, and complete the smooth roll out of Travel Rule compliance, all in line with global and local regulations.

Notabene is SOC-2 security certified since 2021. Over 85 companies leverage our software to manage real-time regulatory and counterparty risk in virtual asset transactions, including Copper, Luno, Crypto.com and Bitstamp. Headquartered in New York, Notabene is a global company with presence in Switzerland, Singapore, and the United Kingdom. 

LinkedIn | Twitter

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Media contact:

Sacha Lowenthal

Head of Marketing, Notabene

sacha@notabene.id 

April 5, NEW YORK, NY AND SINGAPORE - Bake, formally known as Cake DeFi, a leading fintech platform providing easy access to Decentralised Finance (DeFi) services and applications, announced today that it has integrated Notabene’s crypto pre-transaction decision-making platform for crypto regulatory compliance. By integrating Notabene's compliance platform, Bake will ensure a seamless rollout of Travel Rule compliance in line with global regulations, starting in Singapore. 

The Crypto Travel Rule mandates exchanges, digital wallet providers, and financial institutions that deal with virtual assets to disclose, collect, screen, and transmit customer data beyond a certain threshold. One of the reasons Bake has selected Notabene's holistic solution is to overcome key challenges posed by the Travel Rule for large companies in the cryptocurrency industry. This includes the need for a solution that can handle the varying jurisdictional implementations of the Travel Rule and connect to VASPs globally.

For instance, in Singapore, the Travel Rule applies to all holders of a payment service license under the Payment Services Act 2019. It requires Originator VASPs to transmit value originator and beneficiary customer information to the Beneficiary VASP, regardless of the value transfer amount. Further information is required if the SGD 1,500 threshold is exceeded. The United States Financial Crimes Enforcement Network has set the threshold at USD 3,000, while the European Banking Authority has a threshold at EUR 1,000. 

Notabene's platform helps customers navigate the complexities of transacting across borders with counterparties subject to different travel rule obligations, both in terms of thresholds and scope of required information. This is achieved by embedding jurisdictional rules in the platform. By using Notabene, Bake can manage all transactions in one dashboard with a unified set of rules that automate decision making prior to transactions being irrevocably processed by the blockchain. The platform also provides multi-entity support, allowing Bake to manage transaction flow to the correct entity based on the appropriate jurisdictional requirements.

“This partnership with Notabene will ensure that effective travel rule compliance measures are put in place, preparing us for the enhanced regulations that will soon come into force.” said Dr Julian Hosp, CEO and Co-Founder of Bake. “Security, transparency, and compliance, are core values that guide everything that we do at Bake. The successful integration of the Notabene platform underscores our commitment to deliver secure and practical solutions to our customers, while keeping up with worldwide regulations.”

“We are proud to partner with Bake in the effort to create a safer blockchain economy,” said Pelle Brændgaard, Co-Founder and CEO of Notabene. “Bake was looking for a trustworthy partner that facilitates due diligence, wallet identification, and automates transactions and we look forward to working with them in the shared mission of enabling safe and trusted crypto transactions.” 

Notabene provides tools, software, and comprehensive data to help crypto exchanges comply with the new requirements of FATF guidelines, including the Travel Rule, while simultaneously unlocking the flow of trillions of institutional dollars into the space. After successfully integrating Notabene's Travel Rule solution, Bake aims to provide the highest levels of data privacy while enabling participants to send the required Travel Rule data to the correct counterparty in a protected manner.

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About Bake

Bake is a fully transparent, highly innovative fintech platform dedicated to providing easy access to decentralized financial services and applications by enabling users to generate returns from their crypto and digital assets. Founded in 2019, Bake is headquartered in Singapore and subject to applicable local laws and regulations.

By enabling and empowering retail and institutional investors to harness the potential of DeFi, Bake aims to educate and inform people around the world on crypto and DeFi in a simple, easy-to-understand, and seamless manner.

For more information, please visit https://bake.io/.

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About Notabene

Notabene's platform helps financial institutions and crypto businesses unlock their full potential in the digital economy. With a focus on security, simplicity, and end-user experience, Notabene customers can automate real-time decision-making, perform counterparty sanctions screening, identify self-hosted wallets, and complete the smooth roll out of Travel Rule compliance, all in line with global regulations.

Notabene is fully SOC-2 security certified. Over 70 companies leverage our software to manage real-time regulatory and counterparty risk in virtual asset transactions, including Luno, Crypto.com and Bitstamp. Headquartered in New York, Notabene is a global company with presence in Switzerland, Singapore, and the United Kingdom. 

Get started today for free with SafeTransact-Rise and respond to regulated transactions for free using the world's largest VASP Network. ‍

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For media queries, please contact:

Bake

Elissa Young

Senior Public Relations Manager

(e) elissa.young@cake.group

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Notabene

Sacha Lowenthal

Head of Marketing

(e) marketing@notabene.id 

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The Financial Action Task Force (FATF)'s decision-making body, the FATF Plenary, meets thrice annually in October, February, and June. During these sessions, the Plenary considers mutual evaluation reports, policy and governance matters and produces Plenary updates to close loopholes, set forth strategic initiatives, and finalize work in several crucial areas. On February 24, 2023, FATF concluded a second plenary, comprising delegates from over 200 jurisdictions of the Global Network at the FATF headquarters in Paris. 

Notabene welcomes the output from FATF's Plenary in Paris last week, where 206 jurisdictions agreed on an action plan to drive timely implementation of global crypto rules, with a particular focus on the Travel Rule:

• FATF notes that "many countries have failed to implement these revised requirements, including the travel rule which requires obtaining, holding and transmitting originator and beneficiary information relating to virtual assets transactions."
• FATF members agreed on a roadmap to strengthen the implementation of FATF standards on virtual assets and virtual asset service providers.
• Strong crypto regulation can drive down ransomware revenue and criminal activity using virtual assets.

At Notabene, we are thrilled to see regulators taking action to level the playing field, and tackle challenges VASPs encounter with the roll-out. With this action plan, we hope that FATF members will enforce a similar implementation timeline and attempt to unify the travel rule requirements across jurisdictions. In our State of Crypto Travel Rule Compliance Report (published Jan 2022), 52% of companies cited sunrise issues and regulatory clarity as their primary obstacles to compliance.

We applaud the many VASPs who have already taken action to start complying. In 2022 alone, we have onboarded 200+ VASPs to our Sunrise Plan and helped 50+ VASPs go live with the Travel Rule. 

But challenges remain. And we, as an industry, cannot afford to sit on the sidelines. If we want to make new regulatory requirements like the travel rule work for us while preserving privacy of end users, it is imperative that we collaborate on open standards and scalable data transmitting. We need to collaborate ASAP on a unified approach around privacy and security standards and VASP identification. These efforts must be future-proof to create a welcoming and safe environment for the current and next generation of crypto users.

Reducing illicit transactions and improving end-user safety are the driving forces behind this global regulatory shift. Making safe, compliant crypto transactions a part of the everyday economy is Notabene's fundamental purpose. By making Travel Rule compliance more manageable and scalable for companies worldwide, we're taking a significant stride towards achieving this future.

Below, we dive into the key Travel Rule-related takeaways from the FATF Plenary conclusion.

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5 key Travel Rule takeaways from the FATF Plenary

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1. The FATF Plenary suspended the membership of the Russian Federation

The Russian invasion of Ukraine prompted the FATF to suspend the Russian Federation's FATF membership and advises all jurisdictions to be vigilant to current and emerging risks from the circumvention of measures taken against the Russian Federation to protect the international financial system.

2. FATF agreed on revisions to Recommendation 25 on transparency and beneficial ownership of legal arrangements.

Delegates also agreed on new guidance, which will be published on March 23, 2023, which will help countries and the private sector implement FATF's strengthened requirements on Recommendation 24 on transparency and beneficial ownership of legal persons.

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3. Delegates agreed on an action plan to drive timely global implementation of FATF standards relating to VAs, including the transmission of originator and beneficiary information. 

Plenary attendees agreed upon a roadmap to strengthening the implementation of FATF Standards on virtual assets and virtual asset service providers (VASPs) during the Plenary. This will involve assessing the current level of implementation across the global network. By the first half of 2024, the FATF will report on the actions taken by its members and FSRB countries with significant virtual asset activity to regulate and supervise VASPs.

4. The FATF will publish a series of reports that explores risk indicators for ransomware in 2023

• ‍Disrupting Ransomware Financial Flows

To effectively combat the laundering of ransomware payments, authorities in each country must enhance and utilize existing international cooperation mechanisms. FATF's upcoming report in March 2023 will feature a list of risk indicators that can aid public and private entities in detecting suspicious ransomware-related activities.

• ‍Money Laundering and Terrorist Financing in the Art and Antiquities Market 

This report provides risk indicators for identifying suspicious activities and good practices countries have implemented, such as specialized units and cooperation with experts to identify and repatriate cultural objects involved in money laundering or terrorist financing.

• ‍Mutual evaluations of Indonesia and Qatar

‍The FATF praised Indonesia's robust legal framework and technical compliance but advised improving risk-based supervision of non-financial businesses and using effective sanctions for non-compliance. Qatar has improved its AML/CFT regime but needs to enhance beneficial ownership information access and targeted financial sanctions. FATF will release its reports on Indonesia and Qatar in May 2023.

Additionally, the Plenary agreed to undertake new projects on money laundering and terrorist financing related to cyber-enabled fraud and on the use of crowdfunding for terrorist funding.

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5. The FATF has updated the countries on their monitoring lists 

During the Plenary, the FATF added South Africa and Nigeria to the increased monitoring, or grey list, and removed Morocco and Cambodia.

 The following jurisdictions are subject to increased monitoring as of February 2023:

• Albania
• Barbados
• Burkina Faso
• The Cayman Islands
• The Democratic Republic of the Congo
• Gibraltar
• Haiti
• Jamaica
• Jordan
• Mali
• Mozambique
• Nigeria
• Panama  
• The Philippines
• Senegal
• South Africa
• South Sudan
• Syria
• Tanzania
• Turkey
• Uganda
• The United Arab Emirates
• Yemen

FATF's blacklist:

• Iran
• Myanmar
• North Korea

Liminal will be integrating Notabene’s Travel Rule technology into its custody solution to provide a complete solution to the market

Digital Wallet Infrastructure platform ‘Liminal’ announces a partnership with ‘Notabene’, the leading end-to-end solution for crypto Travel Rule compliance, enabling safe and compliant crypto transactions. As a part of this partnership, both companies will work together to create a safe and compliant crypto ecosystem.

The collaboration allows Liminal and Notabene to provide an integrated solution for compliant crypto transactions. While Liminal's blockchain platform enables secure digital asset management, Notabene's compliance technology ensures that all transactions comply with Travel Rule requirements. Together, the two companies are offering a comprehensive suite of compliance solutions that will help users efficiently execute and track their digital asset transactions in a compliant manner.

As a part of this partnership, Liminal will integrate Notabene’s Travel Rule solution with a set of standard rules to provide a plug-and-play Travel Rule solution within its platform for its clients. Under this, Liminal’s clients would create profiles in Notabene’s VASP network, where they can also join online product training sessions.

Commenting on the collaboration, Manan Vora, SVP of Strategy & Operations at Liminal, said, “Liminal and Notabene are committed to making digital asset transactions more secure and compliant. With this partnership, we are taking a significant step towards achieving this goal. The integrated solution will help to ensure that the cryptocurrency market remains compliant and secure for all users.”

"Through Travel Rule compliance, we're not just raising the bar for the industry - we're building a foundation of trust that will help bring cryptocurrency into the mainstream economy. We're thrilled to be teaming up with Liminal to make the crypto world a safer and more compliant place for everyone."

The partnership is expected to benefit both companies as well as the cryptocurrency market as a whole. It will help to reduce the risk of non-compliance while providing users with a secure and reliable way to manage their digital assets. Additionally, the partnership will provide industry-leading compliance technology and expertise, as well as a seamless user experience.

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About Liminal

Liminal is an automated wallet infrastructure platform that offers robust security to digital assets. An ISO 27001 and 27701 certified organization, Liminal, is based in Singapore. Liminal enables crypto-native companies to securely scale their digital asset operations through automated, plug-and-play wallet architecture. They provide a combination of multi-signature and multi-party computation (MPC) to provide secure, efficient, and compliant access to digital assets. Its operational excellence framework provides efficient fee management, transaction confirmation guarantees, seamless onboarding, and other wallet operations hence, saving businesses significant development costs. Liminal’s unified interface ensures the same wallet management experience across multiple blockchains. Its proprietary regulatory readiness program, which includes AML checks, travel rules and CCSS-compliant platforms, helps projects fast-track their compliance journey.

About Notabene 

Notabene is a reg-tech SaaS solution that turns regulatory compliance into a competitive advantage. Notabene is working to make crypto transactions a part of the everyday economy by providing software, tools, and comprehensive data to manage regulatory and counterparty risks in crypto transactions. Companies leverage our end-to-end FATF Travel Rule solution to identify virtual asset accounts, perform mandated VASP due diligence, and manage global transactions from one dashboard. Trusted by leading exchanges, Luno, Bitso, Crypto.com, and more. Notabene is headquartered in New York with offices in Zug and Santiago de Chile. To learn more, visit www.notabene.id. Follow us on LinkedIn and Twitter. 

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There is a misconception about crypto and sanctions, mainly the thought that “it’s a wild west and bad actors can evade sanctions through the use of crypto.” Quite the contrary is true; sanctions authorities in many jurisdictions have ensured that relevant legal and regulatory requirements apply comprehensively to crypto assets. Sanctions equip authorities with the necessary enforcement powers to act against breaches of sanctions that may involve crypto assets. 

Recent enforcement actions against crypto companies for breaching sanctions also helped bring this to light. Russian sanctions and the U.S. Treasury’s Office of Foreign Assets Control (OFAC) designations have shown that the crypto industry needs to rethink how they approach sanctions compliance. In 2022 alone, Blender.io, Tornado Cash, Hydra, Garantex, and many others helped criminals carry out ransomware attacks, scams, and money laundering through their services. Chainalysis reported that 44% of 2022’s illicit transaction volume came from activity associated with sanctioned entities–in a year when OFAC launched some of its most ambitious and difficult-to-enforce crypto sanctions yet.

So far, the topic of sanctions compliance has been primarily centered around crypto exchange users. Shall we cut ties with all Russian customers? Are Iranian nationals using our exchange? But, when facilitating transactions on behalf of their customers, another element needs to be considered: who are the counterparties receiving the funds? If virtual asset service providers (VASPs) do not comply with the Financial Action Task Force’s Travel Rule as it continues to be enforced across the globe in different jurisdictions, they are not screening counterparty customers for sanctions, leaving VASPs in the dark about whether they facilitate transactions with sanctioned individuals.

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The Rise of Sanctions affecting the Crypto Industry

In April 2022, OFAC sanctioned the crypto exchange Garantex, which accounted for the majority of sanctions-related transaction volume last year. As a Russia-based business, the exchange has been able to operate with impunity. In August 2022, Tornado Cash, an Ethereum-based mixer, was blacklisted by the OFAC. The reason: The Lazarus hacker group linked to North Korea used the mixer to transfer funds. Although Tornado Cash was not the first mixer sanctioned last year, it provoked outrage in the crypto community because Tornado Cash is a noncustodial, open-source tool–a sign of things to come: protocol-level sanction action.

More recently, in January 2023, the United States Department of the Treasury Financial Crimes Enforcement Network (FinCEN) labeled crypto exchange Bizlatzo as a “primary money-laundering concern,” for failing to “effectively implement policies and procedures designed to combat money laundering and illicit finance” pursuant to section 9714(a) of the Combating Russian Money Laundering Act — passed as part of the 2020 National Defense Authorization Act. Five days later, The U.S. Justice Department charged Bitzlato with money laundering, and authorities in France, Spain, Portugal, and Cyprus reportedly seized control of crypto wallets containing more than $19 million in cryptocurrency as part of enforcement actions against crypto firm Bitzlato. 

These examples present an obvious obstacle: VASPs can unknowingly facilitate transactions with sanctioned counterparties. Transactions associated with Garantex, Bizlatzo, or any other sanctioned crypto service represent substantial compliance risk for businesses subject to U.S. jurisdictional regulation and consequences, including fines and potential criminal charges.

VASPs must have the ability to determine if their clients are sending transactions to sanctioned entities, wallets, or jurisdictions by implementing Travel Rule compliance for transaction-level counterparty and sanction insight.

The missing piece of the puzzle: Travel Rule Compliance

Historically, VASPs have solely focused on performing sanction checks on their customers during the onboarding process. VASPs currently leverage blockchain analytics companies to screen and identify sanctioned wallet addresses.  Further, VASPs use various geofencing companies and methods to uncover if any customers are in sanctioned jurisdictions through methods like device fingerprinting, IP and GPS location, etc. However, sanctions compliance should also include screening for counterparty crypto wallet addresses and the beneficiary VASP’s customers–which would enable the VASP to reject transactions from another VASP that may have a potentially sanctioned customer or wallet address– before it comes to your VASP. Major financial regulators worldwide are now addressing this blind spot to manage pre-transaction counterparty sanctions risk.

Regulators are turning their attention to counterparty sanction screening compliance, as noted by the recent developments in the European Union's Transfer of Funds Regulation (TFR). In April, the EU will vote to confirm its crypto-focused legislation, the Markets in Crypto-Assets (MiCA), and the TFR. VASPs registered in all 27 EU member states will have to comply with the Travel Rule once rectified.

The draft text of the TFR requires EU VASPs to have policies and controls in place to screen both their customers and counterparty customers for financial sanctions. This includes screening against national and EU lists of designated persons. The EBA will provide guidelines for these policies and controls.

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What does the Travel Rule require VASPs to do?

Created by the United States’ FinCEN for fiat in 1996 and extended to crypto transactions by the Financial Action Task Force in 2019, the crypto Travel Rule requires VASPs and financial institutions to disclose specific customer data when transacting crypto assets. Additionally, the financial institutions must collect information about the counterparty customer, screen the counterparty customer against sanctions lists, and perform due diligence on the counterparty institution. 

A missing piece of the puzzle, which has yet to make the headlines with eye-opening enforcement actions, is counterparty identification. With the exception of those implementing effective Travel Rule programs (and this number is exponentially increasing, especially this year), crypto companies can unknowingly facilitate transactions to sanctioned parties. Travel Rule compliance is a crucial element missing from VASP’s sanctions compliance frameworks. 

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An effective sanctions compliance program cannot focus only on customer sanction screening. It also needs to consider the specificities of crypto transactions, including the fact that blacklisting a blockchain address does not automatically mean freezing its money. A sanctioned individual can continue to create and operate through brand new addresses that OFAC cannot immediately tie to their identity. We will have to see the steps OFAC will take around peer-to-peer transactions in the future. Until then, crypto companies must leverage Travel Rule compliance solutions to solve counterparty risk. 

Even during times of economic downturn VASPs are poised to spend more on compliance this year. In its recent Targeted Update on Implementation of Standards, the FATF reports that 29 jurisdictions have crypto Travel Rule legislation in place. In order to close the gap and mitigate risks from jurisdictional arbitrage, regulators are pushing out another wave of enforcement dates in 2023; Hong Kong will enforce the Travel Rule on June 1st, 2023, and the United Kingdom will follow suit on September 1st. 

To protect themselves from potential legal and financial risks from noncompliance as the Travel Rule is rolled out to solve these problems, VASPs must integrate software that enables their compliance team to: 

• Identify suspicious and/or regulated transactions
• Identify and verify the beneficiary customer and institution
• Verify wallet ownership / collect information about the Beneficiary (depending on local requirements)
• Screen the counterparty customer for sanctions
• Verify the counterparty company’s AML/CTF standards
• Apply relevant jurisdictional regulations
• Block transactions to sanctioned individuals
• Securely transmit customer identifying data (during a Travel Rule transaction routed to another VASP).

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What can Notabene customers do today to block transactions with sanctioned parties?

Notabene customers can identify sanctioned counterparties and block ensuing transactions effectively by using the features noted in the image below.

To identify counterparty VASPs, perform VASP due diligence, identify counterparty customers, monitor wallet risk scores, and sanction screen at scale, customers can set risk-based rules in our Rule Engine to restrict incoming or outgoing Travel Rule data transfers with VASPs that do not meet their diligence criteria.

By defining these risk-based rules in our Rule Engine to prevent incoming or outgoing Travel Rule data transfers with VASPs that don't fulfill their diligence standards, Compliance Officers can effectively mitigate AML-related counterparty risk by tying this mechanism into the transaction flow.

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Our Rule Engine allows you to set comprehensive controls to effectively perform AML-related counterparty risk mitigation. Click here to learn more.

The time to comply is now

In conclusion, counterparty sanctions screening compliance is a critical aspect of sanctions compliance and must be taken seriously. The recent enforcement actions against VASPs for breaching sanctions have highlighted the importance of a robust compliance framework. 

It’s time for the crypto industry to recognize its impact on the world order. Suppose the sector’s scale and maturity allow it to be a de facto competitor to the traditional financial system. In that case, crypto could be instrumentalized as a means to evade sanctions, which would massively affect how the world runs its business. Only an effective sanctions compliance program that includes counterparty sanction screening through Travel Rule compliance can mitigate this looming risk. The time to prioritize Travel Rule compliance is now.

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This article was first published on Law360.

The Crypto Industry’s Trust Deficit and the Need for Stronger Security Measures in 2023

With the massive influx of new users entering the crypto space in 2021 and the first half of 2022, exchanges rushed to launch new and innovative products as they competed for users. However, rapid launches of products outpaced internal efforts to build risk controls and proper security practices. This year tested trust with the downfall of Three Arrows Capital, Celsius Network, and FTX, among others. This whirlwind showed us that we still have ways to manage counterparty risks and build trust in cryptocurrency transactions. During the latter part of the year, consumer and investor trust in the industry dwindled as scrutiny from regulators grew.

The shaken trust in the crypto industry did not slow down financial institutions’ roadmaps, with the likes of Bank of New York Mellon, State Street, and Fidelity Digital Assets launching digital asset custody or trading platforms.

Overall, this year saw both crypto-native companies and financial institutions realizing that a substantial competitive advantage lies in providing secure and safe crypto transactions and have invested in building proper security and risk controls. We foresee companies investing more and more resources to ensure transactions go to trusted parties in 2023. We suspect many of these will emerge from the crypto winter as crypto champions. 

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Regulatory enforcement is here.

The Russia-Ukraine conflict sparked a significant movement among governments to impose sanctions on Russian individuals and entities. As the world watched, the crypto industry waited with bated breath to see if sanctioned individuals would use cryptocurrencies to evade fiat sanctions. The war became a key catalyst for the enforcement of crypto regulations, with jurisdictions like Estonia implementing the Travel Rule 17 days into the conflict and setting the enforcement date just three months behind on June 15th, 2022, creating the fastest turnaround for Travel Rule enforcement in history. 

Travel Rule compliance is a critical method for transaction risk mitigation, allowing crypto exchanges to identify and block transactions to potentially sanctioned actors. As pointed out in FATF’s Targeted Update on Implementation of FATF’s Standards on VAs and VASPs, published on June 30th, the industry has made significant progress on implementing the travel rule, but there are still many shortcomings. In particular, FATF expects local regulators to move quicker on enforcement and reducing jurisdictional arbitrage. It also has asked the crypto industry to work on interoperability. 

As the regulator’s patience wanes, 2023 will be crucial in rolling out Travel Rule compliance. At Notabene, we have seen momentum rise globally among VASPs to comply with the travel rule and put in place real-time risk assessments of transactions, regardless if the counterparty wallet is hosted or self-hosted. Given this momentum, upcoming regulatory enforcement dates, and the volume of VASPs getting ready today to comply, we predict 70-80% of the industry to go live with implementing the Travel Rule. 

In 2023, regulators will likely implement strict regulations to address consumer protection and transaction identification. We foresee a continued focus on sanctions and implementing beneficial ownership rules in the US, which is part of FinCEN’s AMLA 2020. Furthermore, we also anticipate more enforcement actions to be taken against crypto companies that have inadequate controls.

As we prepare for an eventful year in crypto regulation, we share a few of our company highlights from 2022. Notabene’s 2022 highlights: Rapid network growth, increased transaction volumes, and new features and improvements:

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1. Notabene’s transaction volume grew 90x in 2022

Transaction volumes through our Travel Rule solution have risen 90x since December 2021. With a network today of 800+ VASPs, Notabene Network members can send or receive transfers through Notabene, using more than 130 asset types. Our simple integration process and excellent customer support ensured that even small and medium-sized companies could meet strict deadlines.

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2. Onboarded 200+ customers to the Sunrise Plan

Our customers’ success is essential; they cannot successfully comply if their counterparties do not have the necessary tools to respond to their data transfer requests. To solve reachability issues during the travel rule sunrise period, we launched the Sunrise Plan to allow all VASPs–not only Notabene members–to respond to pending Travel Rule transactions at no cost. This plan provides compliance officers with access to our compliance dashboard, allowing them to set up automated compliance workflows and use our integrations with blockchain analytics and sanctions screening providers. 

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3. Delivered new features launches, integrations, and improvements

Compliant VASPs rely on several RegTech solutions to make confident, comprehensive, and well-informed decisions to manage their AML/CFT risk. Throughout 2022, we launched the following components to make Travel Rule compliance scalable and frictionless.

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4. Launched SafePII - the industry’s-first end-to-end encrypted escrow service for safe Travel Rule transactions

Data security and privacy for end users remain one of Notabene’s core values. To protect the personally identifiable information of our client’s customers en route to their transaction counterparty, we’ve introduced three encrypted escrowed PII communication routes to our advanced security infrastructure.

SafePII is a pioneering feature that enables VASPs to securely exchange encrypted personally identifiable information with counterparties while simultaneously managing their encryption keys. This innovative solution is the first of its kind in the industry.

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5. Awarded 60+ certificates to participants in our inaugural Travel Rule Training program

Implementing compliance processes and internal controls is crucial for launching compliance with the Travel Rule. As this is a new challenge for Compliance Officers in the crypto industry, we have created the Notabene Travel Rule Training Program to equip our customers with the necessary knowledge and skills to meet this mandate. We’re delighted to share that we’ve issued over 60 certificates for completing the training. 

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In the Training program, participants explore different Travel Rule scenarios to gain a deeper understanding of Travel Rule compliance. During the bespoke testing cohort, they practice sending and receiving Travel Rule transfers under the advisory of our Regulatory and Customer Success teams. Keep your eyes peeled in 2023 as we expand this program! 

6. Published the industry’s first State of Travel Rule Compliance Report

Furthering our mission to assist businesses in navigating the changing regulatory landscape for cryptocurrencies, we surveyed compliance officers globally to gauge compliance readiness and understand the main pitfalls of implementing the Travel Rule in the crypto and financial services industries. 

The survey responses informed an industry-first study, The State of Crypto Travel Rule Compliance Report 2022. The Financial Action Task Force cited our report in its recent Targeted Update on Implementation of the FATF Standards on VAs and VASPs.

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If you would like to add insight to our upcoming State of Crypto Travel Rule Compliance Report 2023, please reach out to marketing@notabene.id.

7. Hired amazing talent 

We added vital positions to critical support roles to keep up with our rapid growth and increased focus on the industry. The Notabene Team grew from 17 to 33 this year, including our first Regulatory and Compliance hire, Lana Schwartzman. 

Additionally, our team members racked up many accomplishments this year. NYC Fintech Women recognized Notabene co-founder and COO Alice Nawfal on their 2022 list of Inspiring Females in Fintech. Legal Engineer Catarina Veloso was selected to join the European Banking Authority’s AML Working Group. Lana Schwartzman, Head of Regulatory & Compliance, was nominated for Women in Tech’s Rising Star of the Year. Company-wise, Notabene took home the “Best Solution in Travel Rule Compliance” award at Regulation Asia’s 5th Annual Awards for Excellence. The Financial Conduct Authority (FCA) accepted our Travel Rule solution into the Regulatory Sandbox initiative.

Thank you for joining us on this journey. We can’t wait to see what’s in store for 2023!

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Yours,

The Notabene team. 

Notabene is proud to announce that our co-founder and COO, Alice Nawfal, has been honored by NYC Fintech Women on their list of 2022 Inspiring Females in Fintech!

NYC FinTech Women’s mission is to connect, empower and promote women in FinTech. Through their annual Inspiring FinTech Females list, they recognize female professionals who are driving change and advocating for gender equity in their roles. This prestigious honor celebrates the exceptional work and accomplishments of women in fintech and shines a light on their contributions to the field. It's a chance to celebrate and uplift the achievements of these inspiring women and the impact they are making in the industry.

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Alice advocates for diversity and inclusion

At Notabene, Alice has played a crucial role in driving our success and pushing the boundaries of what is possible in fintech. Here and in the industry at large, she is a strong spokeswoman for diversity and inclusion.  

Alice believes that a female-inclusive workforce is critical to the crypto industry. “For crypto to go mainstream,” she says, “it needs to be accessible to half the population, the 50% that represents women. And to succeed at serving that population's needs, their representation is important among the people providing the service. We need equal representation of women in crypto - from running teams and building tomorrow's products to interacting with regulators - or else we fail at that goal. The number of great women I meet every day across the Web3 space building, creating, shipping, managing - it gives me a lot of confidence that we are building for a more equitable and inclusive world.” 

Alice’s beliefs are showcased by her work in personally building out Notabene’s team with ambitious, smart, and globally diverse team members, and as of today, a significant portion of Notabene’s senior leadership roles are held by women from all over the world. As their team continues to expand, that number is only expected to grow.

Before entering the blockchain industry, she worked as an associate at The Economist, conducting high-impact, data driven analysis on public policy with an expert focus on gender, unemployment, and labor. There, she participated in the "No Ceilings: The Full Participation Project"​ with the Economist, the Clinton Foundation, and the Gates Foundation, a data-driven approach to gender equality that measured the gains and gaps that women and girls have achieved across more than 190 countries over the past two decades. 

During her career as COO of Notabene, the company has built an industry-leading reputation in global Travel Rule compliance and education. Alice’s management of Notabene’s go-to-market strategy has led to the development of several key aspects to their success, including the global rollout of Notabene’s Travel Rule Solution, an end-to-end FATF compliance solution to identify virtual asset accounts, perform mandated VASP due diligence, and manage global transactions from one dashboard. She is also responsible for launching successful and innovative partnerships to grow the business and enhance product value proposition. 

Alice has a BS in math and economics from MIT, an MPA from Harvard Kennedy School of Government, and an MBA from Wharton. She’s a huge inspiration to our team and our industry.

The Notabene team is grateful to have the opportunity to work alongside such a talented and accomplished individual, and we are looking forward to seeing all the success that Alice will continue to bring to fintech’s women in the future. Congratulations, Alice, on this well-deserved recognition!

We recently sat down with Lana Schwartzman, Notabene’s newly appointed Head of Regulatory & Compliance, who discussed her history in compliance, what led her to transition to the crypto industry, and how Travel Rule compliance will be at the forefront of preventing illicit activity.

Q: What is your history in compliance?

A: Oh, it’s a long one! I have spent 17 years in compliance and AML regulations across Web3, digital assets, fintech, and TradFi. I began my compliance career at Morgan Stanley on the compliance team and eventually moved to Deutsche Bank. I then spent seven years at Grant Thornton’s Regulatory and Compliance Risk Advisory Services practice, where I advised the early crypto adopters (and TradeFi companies) on setting up and implementing compliance programs, helping them think about digital onboarding, as well as managing teams that did the annual independent compliance program reviews, and consent order validation for various cryptocurrency companies, financial institutions, and foreign banking organizations. 

Later, shifting into crypto, I served as Chief Compliance Officer for two crypto companies, the latest being Dapper Labs. Any NFL ALL-Day fans out there? As a CCO, I designed and implemented BSA/AML/Sanctions Compliance programs and led MSB/MTL licensure strategy and process, all while keeping the pulse on the ever-changing regulatory environment.

Q: What drew you to the crypto industry, and why compliance in particular?

A: I always wanted to fight the good fight and make a difference by catching bad actors. Right out of college, I was recruited into the compliance world. While in this world, virtual currencies came to my attention. With my compliance hat, I found it very interesting that one could transfer value from A to B without many regulations (back in the day). I started reading as much as possible on this and slowly became a crypto compliance SME. I’m a techie at heart, and this was the next frontier. 

Q: What do you see as the market opportunity for crypto compliance and Notabene’s part in driving that?

A: Regulation, now more than ever, along with regulatory clarity, is super important for the industry. As a former CCO for various crypto companies, I always craved that certainty. The Travel Rule is one of the industry’s most important rules, which, if the challenges are overcome with time, will be at the forefront of preventing illicit activity if it works in the way it was supposed to. Notabene’s end-to-end platform is Travel Rule messaging protocol agnostic. Additionally, it supports all asset types. Compliance Officers can use the Rules Engine to set smart rules to account for international jurisdictional differences. Thus, it is the premier industry solution for complete compliance with the Travel Rule. 

Q: Why did you decide to join Notabene? Why now?

A: I have been in the crypto compliance space for almost 12 years and have been a CCO at two crypto companies - in the crypto world, that is a lifetime! I wanted to bring my CCO perspective to a vendor product so that it can be built not just by engineers and product development - but with compliance and the Compliance Officers’ journey in mind. I wanted to be the customer voice internally and externally. Further, I think the Notabene team is brilliant and having two female co-founders is a bonus. These incredibly seasoned and educated professionals bring years of experience to build the best platform for Travel Rule compliance.

Q: How do you see your role as Head of Regulatory & Compliance shaping the future of Notabene?

A: I’m joining Notabene at a pivotal moment in the industry as regulators worldwide sharpen their focus on virtual assets. Having an internal voice of CCOs at Notabene, I believe, will play a significant role in shaping our upcoming product features and services. Another goal is to enrich Notabene’s Compliance Officer community with pointed webinars, off-sites, and working groups for VASPs coming to terms with this new regulatory and technological environment. I will also engage with various regulators to ensure they understand our community and product and directly hear what is vital as we evolve. 

Q: What’s keeping you up at night (as a CCO)?  

A: Regulatory uncertainty and lack of clarity. 

Q: Which jurisdictions do you have your eye on as this rolls out, and why? 

A: Of course, the US is the shakiest and needs the most clarity. EU, under MICA, will be an extensive reach with all the changes.‍

Q: Which publications do you read on a weekly/daily basis? 

A: I’m all over Crypto Twitter! But I am a fan of my friend Ari Redbord at TRM Labs and his weekly updates. I’m big on podcasts like:

• “Web3 with a16z crypto” 
• “Empire” by Blockworks 
• “Public Key” by Chainalysis 
• “Unchained” with Laura Shin 
• “Law of Code” by Jacob Robinson 
• “What bitcoin did” by Peter McCormick
• “Decrypt” with Matthew Diemer 
• “Great Women in Compliance” by Corporate Compliance Insights

And many more. I read Coindesk, Cointelegraph, and Morning Brew….and unrelated to work, different cooking/recipes blogs and weekly Torah summaries. 

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Want to know more about Lana? Read the press release. Reach out to Lana on Twitter or Linkedin.