Shyft Network is adding Huobi, Bitfinex and Tether to its crypto-focused anti-money laundering (AML) platform, and launching a âgovernance task forceâ including a host of new and existing members.
Announced Wednesday, Shyftâs Veriscope Governance Task Force includes recent joiners Binance and Bitfury, as well as a globally distributed collection of crypto firms such as BCW, HashKey Pro, Tokocrypto, Unocoin, Paycase Financial and CoinHako.
Shyft, a well-known participant in the race to bring crypto in line with Financial Action Task Force (FATF) AML regulations, last year hired heavyweight advisers Rick McDonell (former FATF executive secretary) and Josee Nadeau (former head of the Canadian delegation to the FATF). The two will co-chair the governance task force.
Related: Ethereum Transaction Fees Set a Record Once Again as DeFi Becomes Even Pricier
âVeriscope intends to provide a governance and rules framework whereby virtual asset service providers [VASPs] can trust each other,â McDonell said in an interview. âIt keeps them in a democratic environment in terms of making rules and, because of the transparency between them, allows firms to take the risk of sharing information that could at times be commercially competitive.âÂ Â
Read more: Inside the Standards Race for Implementing FATFâs Travel Rule
In June 2019, the FATF issued guidance requiring VASPs to share know-your-customer (KYC) data between a transacting originator (sender of funds) and a beneficiary (receiver). This personally identifiable information (PII) must âtravelâ concurrently with digital asset transfers of over $1,000.Â Â
In order not to simply rebuild SWIFT, a 50-year-old interbank messaging system, the industry has to think about onboarding and governance frameworks, said Shyft co-founder Joseph Weinberg.Â
Related: Huobi Futures to Launch Options Trading This Week, Joining Throng Challenging Deribit
âThe one thing that you canât get away from is you still need to onboard the VASP to the network,â Weinberg said. âItâs really about defining the onboarding governance framework, an open mandate for the best practices for any VASP that has to join into the network. What are the rules?â
Despite the fact crypto was specifically designed to be pseudonymous, the industry has responded energetically with an array of technical solutions and a universally agreed-upon messaging standard.
Read more: Crypto Firms Establish Messaging Standard to Deal With FATF Travel Rule
Coordination among so many approaches to the Travel Rule problem is needed, as are responses to any changes or updates in cryptoâs protean regulation from one jurisdiction to the next as well as incoming FATF guidance.Â
Another key area here is interoperability, Weinberg said; âEveryoneâs talking about it,â he added, but it should be governed by the exchanges rather than protocol teams.Â
No firm should be precluded from accessibility but VASPs globally should be given the tools and provided with a baseline to determine how counterparties are expected to share information with counterparties, said Weinberg.
âItâs an inclusive working team thatâs open to any other VASPs to join,â Weinberg said of the Veriscope effort. âItâs for the users of the system. Shyft developers are handing over the most important decisions to the stakeholders.â
- First Mover: Huobi Takes On OKEx in Futures, Opening New Front in âChineseâ Rivalry
- Huobi and OKEx Battle for Supremacy in China
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.