Representatives of the world’s leading cryptocurrency groups have launched a new initiative that will enable virtual asset providers to carry out transactions in a manner that complies with the guidelines of the Financial Action Task Force FATF, the intergovernmental organization tasked to combat money laundering and terrorism financing.
During the Blockshow Asia conference held in Singapore on November 15, Switzerland-based Crypto Valley Association (CVA), International Digital Asset Exchange Association (IDAXA), ACCESS, the Singapore Cryptocurrency and Blockchain Industry Association unveiled its OpenVASP initiative, which will allow VASPs to transmit blockchain transaction information privately, immediately and securely in compliance with the FATF’s so-called “travel rule.”
In its publication of June this year, the FATF confirmed that VASPs will be required to obtain, hold and transmit originator and beneficiary information for transactions of virtual assets. To meet the new guidelines, Bitcoin Suisse helped spearhead the work of international community members, resulting in a whitepaper that proposes an OpenVASP protocol based on key design principles of decentralization, privacy, broad applicability, while remaining agnostic to the virtual asset being transferred.
“OpenVASP is a roadmap to FATF compliance that enables VASPs to protect private and business-sensitive data. We hope the community will consider it as a blueprint. Building partners are welcome,” said Chris Gschwend, the head of CVA’s VASP AML Taskforce
The OpenVASP whitepaper outlines a protocol that will allow VASPs from across multiple jurisdictions to transact between themselves without necessarily knowing each other and without the need to register with a central authority or database. Key elements of the proposal include structured payment messages, end-to-end encryption, perfect forward secrecy and a smart-contract layer for VASP identity management.
Following the announcement of the OpenVASP initiative, the involved stakeholders will begin outlining specifications for the protocol and invite any and all VASPs and interested parties to participate in the process.
“We are happy to contribute to the development of OpenVASP and to support this movement towards a solution that both upholds the core principles of blockchain and helps serve the needs of VASPs all around the world,” David Riegelnig, Head of Risk Management at Bitcoin Suisse.
Meanwhile, ACCESS Chairman Anson Zeall, who moderated the discussion, said: “I am thankful that we have this whitepaper, which is a strong starting point that upholds the values of blockchain technology. It makes sense to develop a common language, so that VASPs can choose between different compliance solutions.”