The evolving complexities of the global anti-money laundering (AML) regulation of crypto assets have filtered down to the needs of virtual asset service providers (VASP) who are trying to compliantly navigate their way across different jurisdictions. This has become a bewildering experience for even seasoned AML compliance officers. In Q3 this year alone, the EU has passed its MiCA framework, the White House has released its first proposed crypto regulation framework, Singapore is going after crypto firms it deems are driving market speculation rather than innovation, Hong Kong is rolling out a VASP licensing regime from March 2023, and the SEC charged… Kim Kardashian.
As a result, these increasingly complex needs of VASPs now require several AML compliance service providers to offer separate services to make up what clients need to be compliant.
To this end, Sygna has worked closely with other crypto AML firms such as Elliptic, Chainalysis, ComplyAdvantage, and Coinfirm to simplify the compliance end-user experience as well as client resources as much as possible.
We have done this by launching Sygna Hub, our integrated and modular AML compliance platform, where clients can streamline different services into one easy-to-use dashboard, or for VASPs requiring more automation, Sygna Gate, our plug-and-play browser-based platform.
Another key concern for both VASPs and FATF jurisdictions is FATF Travel Rule interoperability, a key development within the Travel Rule landscape. Both Sygna Hub and Gate include our first-to-market Travel Rule solution Sygna Bridge, which facilitates interoperability with other Travel protocols.
Overall, Sygna has received praise for our ability for quick implementation, which remains one of our biggest USPs over competitors. However, there is much more happening in Hub and Gate, which we will cover in this article. We’ll start with recent Sygna product updates and explain how they are relevant to the market/regulatory environment changes and match our clients’ needs.
What’s new in Sygna Hub and Gate for Q4 2022?
SPOT tool for “Satoshi Test”
While FATF and other regulators have rolled out clear guidance and legislation for centralized exchanges and other service providers, the regulation of unhosted wallets is still evolving.
Verifying who you are transacting is a growing concern, and nations like Singapore, Switzerland, Germany, and Liechtenstein now require further due diligence on the VASP side, which has led to an increase in demand for the ability to establish proof of ownership of non-custodial wallet addresses.
To facilitate this identification, Sygna has created the Sygna Private Wallet Ownership Tool (SPOT), which is available in Hub and Gate. Our SPOT tool leverages a “Satoshi Test” by requesting the unhosted wallet address owner to conduct an on-chain transaction to establish proof-of-wallet ownership.
Global VASP list
A general pain point to the crypto industry is knowing which Travel Rule protocol a counterparty applies and mapping all the available VASP data sources together.
Therefore Sygna has integrated access to directory information from our Sygna partners such as CipherTrace’s TRISA to help our clients identify which TR protocol a transaction counterparty VASP is using.
What happens though if a VASP counterparty is not using an interoperable Travel Rule protocol, or worse, none at all? No problem. Sygna clients can use our Sygna Email Protocol to connect with the counterparty VASP.
VASP Server health check
Now Sygna VASPs no longer need to be blind while sending a TR data transfer, since they can be advised on the counterparty VASP server’s health status and take the initiative to proceed with TR data transfers if they feel it’s safe to do so.
Flexible risk screening
Based on their packages and data efficiency policy, VASPs can create customized wallet risk & name sanction screening settings. This convenient feature allows Sygna VASPs to configure their settings in accordance with optimal timing to execute risk screening.
Automation data checking availability
Sygna client VASPs can automate their data checking based on the requirements of different jurisdictions. Specifically, a VASP can set the Originator private information checking rules and allow Sygna to help them automatically accept or reject valid/invalid data transfers.
Conversely, a Sygna VASP can set permissions to ensure they have 100% control over each TR data transfer.
Data transfer record exporting
VASPs can now export all or a preferred range of data transfer records for any compliance requirement including the provision of a detailed data transfer record.
Local Name & Phonetic Name Support (IVMS101)
We’re seeing growing differences between countries and jurisdictions to request Originator or Beneficiary names to be sent ALONG with local name & phonetic name.
In accordance with IVMS101, all Sygna products now support local and phonetic names.