Malta-based digital asset exchange Binance has teamed up with Shyft Network, the developer of a public blockchain protocol, in order to ensure that it is complying with updated Financial Action Task Force (FATF) financial market regulations.
The Shyft Network was developed to offer a decentralized software platform for digital asset industry participants, so that they can satisfy international compliance requirements, such as the FATF’s travel rule.
Samuel Lin, chief compliance officer at Binance, told Cointelegraph on February 27 that, until the development and deployment of the Shyft Network, there was no proper framework that companies could reference in order to ensure their operations complied with updated FATF guidelines for financial transactions.
FATF’s updated rules for virtual asset service providers, or VASPs (released in mid-2019 and scheduled to become effective in June this year) include the travel rule which says that VASPs must obtain and share know-your-customer (KYC) information during financial transactions. Customer data has to be shared if the amount being transferred between two different digital currency platforms exceeds $1,000.
Rick McDonell, former FATF executive secretary and current advisor at Shyft, noted that the partnership will help in moving the crypto industry to “the next level when it comes to effectively interfacing with regulators.”
“Other exchanges would be well advised to participate in federations that practically address global compliance requirements, particularly the FATF’s Travel Rule.”
Shyft aims to encourage crypto-related service providers to adopt an industry-wide solution in order to meet the FATF’s guidelines by using its proprietary identity passporting, database bridging and data attestation tools.
Shyft provides open-source software, which has been developed specifically to ensure that firms are complying with FATF rules and the EU’s GDPR data privacy requirements. The company aims to assist with ensuring full and efficient use of decentralized, blockchain-enabled platforms and to promote secure data-sharing methods.