{"id":7555,"date":"2022-11-30T09:16:33","date_gmt":"2022-11-30T09:16:33","guid":{"rendered":"https:\/\/www.sygna.io\/?p=7555"},"modified":"2022-12-01T03:22:03","modified_gmt":"2022-12-01T03:22:03","slug":"v20-bali-2022-highlights-industry-need-for-enhanced-crypto-travel-rule-solutions","status":"publish","type":"post","link":"https:\/\/www.sygna.io\/jp\/blog\/v20-bali-2022-highlights-industry-need-for-enhanced-crypto-travel-rule-solutions\/","title":{"rendered":"V20 Bali 2022: VASPs Join Regulators and Propose New AML Crypto Solutions"},"content":{"rendered":"\n<p>The recent <a href=\"https:\/\/amp-scmp-com.cdn.ampproject.org\/c\/s\/amp.scmp.com\/week-asia\/opinion\/article\/3200130\/cryptocurrencies-are-facing-existential-moment-and-time-running-out-align-standards\">G20<\/a> summit in Bali, Indonesia, also coincided with the 2022 edition of the V20, (Virtual Asset Service Provider Summit) a cryptocurrency-related offshoot that syncs with the G20 by design, allowing industry leaders to meet with global regulators, legislators, and politicians to get their views on the blockchain industry.\u00a0<\/p>\n\n\n\n<p>V20 Bali was hosted by the<a href=\"https:\/\/www.sygna.io\/blog\/consensus-distributed-coolbitx-shares-asia-fatf-travel-rule-lessons\/\"> International Digital Exchange Association (IDAXA)<\/a>, in cooperation with Asosiasi Blockchain Indonesia (A-B-I). The <a href=\"https:\/\/www.sygna.io\/blog\/what-is-the-financial-action-task-force-fatf\/\">Financial Action Task Force (FATF)<\/a> and the Financial Stability Board (FSB) were both represented at their top level, with FATF President Raja Kumar and FSB Secretary General Dietrich Domanski delivering insightful keynote speeches. The latest V20 followed the <a href=\"https:\/\/www.sygna.io\/blog\/virtual-v20-summit-seeks-industry-response-against-fatf-travel-rule\/\">virtual 2020 edition<\/a> and <a href=\"https:\/\/www.sygna.io\/blog\/tom-maxon-coolbitx-ces-panel-digital-money-forum\/\">2019 conference<\/a> in Osaka, Japan.<\/p>\n\n\n\n<p>As expected, with the event following on the heels of the collapse of crypto exchange <a href=\"https:\/\/www.nytimes.com\/article\/ftx-bankruptcy-crypto-collapse.html\">FTX<\/a> \u2013 and previous calamities this year such as the <a href=\"https:\/\/www.sygna.io\/blog\/terra-luna-stablecoin-regulation\/\">TerraUSD<\/a> implosion \u2013 talk very much centered on containing systemic contagions in the crypto industry. Many fear that the stalled regulatory frameworks for crypto in many jurisdictions is leading to a situation where more disasters are bound to occur.&nbsp;<\/p>\n\n\n\n<p>One only has to look at the bankruptcies of centralized custodians <a href=\"http:\/\/celsius\">Cel<\/a><em>s<\/em><a href=\"http:\/\/celsius\">ius<\/a>, Three Arrows Capital, BlockFi, Voyager, and now possibly DCG\u2019s Genesis to see how this devastating domino effect can wreak havoc on institutional and retail investors alike.\u00a0<\/p>\n\n\n\n<p>In response, FATF president Mr. Kumar highlighted the importance of the crypto industry working with regulators and law enforcement to deter financial crime:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>&#8220;In essence, it is crucial for the private sector and public sector to work closely together to establish close partnerships and share information and expertise&#8221;, he said, adding that industry serves as &#8220;a key entry point into the financial system that makes [Industry] the gatekeepers, the crucial first line of defense.&#8221;<\/p><\/blockquote>\n\n\n\n<p>Key to the V20 discussion again was the Financial Action Task Force\u2019s (FATF)\u2019s Recommendation 16 update, the so-called <a href=\"https:\/\/www.sygna.io\/blog\/fatf-travel-rule-implementation-and-vasp-crypto-regulation-2022\/\">Crypto Travel Rule<\/a>, which has been in place since June 2019. However, it has suffered from a delayed rollout, which is referred to as the <a href=\"https:\/\/cointelegraph.com\/news\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\">\u201csunrise problem\u201d<\/a>. As of June 2022, only about 53 countries, or one-quarter of FATF\u2019s membership, had entered into compliance.<\/p>\n\n\n\n<p>In the absence of further regulatory adoption, one solution under discussion that can move the ball forward is the harmonization of global <a href=\"https:\/\/developers.sygna.io\/docs\/vasp\">virtual asset service provider (VASP<\/a>) counterparty discovery, which happens to be Sygna\u2019s specialty.<\/p>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">V20 Bali: 3 Key Proposals from VASPs<\/h2>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img decoding=\"async\" width=\"1024\" height=\"307\" src=\"https:\/\/www.sygna.io\/wp-content\/uploads\/2022\/11\/image-1024x307.png\" alt=\"\" class=\"wp-image-7557\" srcset=\"https:\/\/www.sygna.io\/wp-content\/uploads\/2022\/11\/image-1024x307.png 1024w, https:\/\/www.sygna.io\/wp-content\/uploads\/2022\/11\/image-600x180.png 600w, https:\/\/www.sygna.io\/wp-content\/uploads\/2022\/11\/image-768x230.png 768w, https:\/\/www.sygna.io\/wp-content\/uploads\/2022\/11\/image-1536x461.png 1536w, https:\/\/www.sygna.io\/wp-content\/uploads\/2022\/11\/image.png 2000w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>The V20 conference concluded with a <a href=\"https:\/\/www.shyft.network\/newsroom\/industry-reps-propose-decentralized-vasp-discovery-system-at-v20-summit\">few key proposals<\/a>:\u00a0<\/p>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Proposal 1: Improving VASP discovery mechanisms<\/h3>\n\n\n\n<p>VASPs have promised to improve their counterparty risk management and enhance AML compliance by using a better VASP discovery mechanism.&nbsp;<\/p>\n\n\n\n<p>Sygna Bridge, our Travel Rule compliance API protocol launched in 2019, offers just that. Coupled with Sygna Hub and Gate\u2019s various VASP-focused tools such as our SPOT Satoshi Test, global VASP list, server health check and flexible risk screening from integrated vendors like Elliptic and Chainalysis, VASPs can get the support they need.&nbsp;<\/p>\n\n\n\n<p>Read more about the <a href=\"https:\/\/www.sygna.io\/blog\/sygna-crypto-aml-compliance-updates-q4-2022\/\">above features here.&nbsp;<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Proposal 2: Reporting threshold equalization across jurisdictions<\/h3>\n\n\n\n<p>The various VASPs in attendance further offered to better harmonize reporting thresholds for cross-jurisdiction crypto transfers, which can vary a lot based on the user\u2019s location.&nbsp;<\/p>\n\n\n\n<p>This would be done by taking a principles-based risk management approach, and the formation of a dedicated working group between the FATF, International Organization of Security Commissions (IOSCO) and privacy regulators.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Proposal 3: Enhancing VASP and regulator collaboration<\/h3>\n\n\n\n<p>A third notable proposal stressed the importance of better dialog between FATF and the Global Privacy Assembly in order to foster a better grasp of data privacy and requested the Financial Stability Board (FSB) create custom regulations for the crypto sector.\u00a0<\/p>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What is the Crypto Travel Rule?<\/h2>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>The Crypto Travel Rule is an anti-money laundering (<a href=\"https:\/\/www.sygna.io\/blog\/what-is-aml-kyc-in-crypto\/\">AML<\/a>) and counter-terrorist-financing (CTR) regulation from FATF. It requires originator and beneficiary data to be shared between virtual asset service providers (VASPs) on transactions over $1,000.<\/p>\n\n\n\n<p>Since VASPs are scattered across territories with different rules and timelines for entering the regulatory fold, this makes it extraordinarily difficult for the <a href=\"https:\/\/www.sygna.io\/blog\/crypto-compliance-aml-travel-rule-problems\/\">Crypto Travel Rule<\/a> to function as intended. This dilemma is known as the \u201csunrise problem.\u201d<\/p>\n\n\n\n<p>At the moment, implementation is also being slowed down by the inability of VASPs to accurately determine exactly who their counterparty is and what Crypto Travel Rule solutions they employ.<\/p>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Sygna can streamline Crypto Travel Rule compliance for VASPs<\/h2>\n\n\n\n<p>Sygna was founded to create modular crypto compliance solutions that work for a broad range of clients. Since VASPs all have their own unique characteristics, solutions must be tailor-made for each one. We keep up with the latest ISMS standards and maintain total data privacy for users.<\/p>\n\n\n\n<p>We offer the following core products:<\/p>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">Sygna Hub<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.sygna.io\/hub_gate\/\">Sygna Hub<\/a> is a robust AML compliance platform for VASPs. It provides the leading third-party AML tools all in one dashboard. It has integrated blockchain analytics, sanction screening from Chainalysis, Elliptic, and more. It also includes the Sygna Bridge Travel Rule protocol, and it\u2019s interoperable with other protocols like TRISA and Veriscope.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Sygna Bridge<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.sygna.io\/bridge\/\">Sygna Bridge<\/a> functions as a standalone API-based Travel Rule protocol for VASPs. It allows them to share required AML data without complication. It supports over 3,000 assets already and has the capability for supporting many more. It\u2019s also been favorably independently assessed by Singapore\u2019s <a href=\"https:\/\/www.sygna.io\/blog\/access-singapore-publishes-travel-rule-assessment-report-on-sygna-bridge\/\">leading ACCESS association.<\/a><\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Sygna Gate<\/h3>\n\n\n\n<p><a href=\"https:\/\/www.sygna.io\/hub_gate\/\">Sygna Gate<\/a> is a browser-only integrated AML compliance gateway for VASPs. It\u2019s a manual version of Hub and requires no technical integration. It shares most of the same features as Hub, with the exception of an API interface and local data storage on the VASP server.<\/p>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<div style=\"height:38px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>As we head ever deeper into the crypto winter, the race is on for the industry to prove that it\u2019s serious about protecting consumers from the ongoing devastation caused by corrupt executives and hackers. While it\u2019s essential that jurisdictions rapidly adopt FATF\u2019s <a href=\"https:\/\/www.sygna.io\/blog\/why-the-travel-rule-is-needed-in-addition-to-kyt-measures\/\">Crypto Travel Rule<\/a>, in the meantime, there are still technological solutions we can pursue to improve the status quo.<\/p>\n\n\n\n<p>For more information on how to get started with Sygna, please visit our <a href=\"https:\/\/www.sygna.io\/\">home page<\/a> and book a demo in the top-right corner.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bali&#8217;s recent V20 Summit connected VASPs with regulators, with new proposals to enhance crypto AML compliance like the Crypto Travel Rule. <\/p>\n","protected":false},"author":7,"featured_media":7556,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-7555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - 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