CoolBitX’ Elsa Madrolle spoke at the GDF Travel Rule Summit, explaining the FATF Travel Rule technical solution Sygna Bridge’s inception, first-to-market strategy and current live production status.
On July 15th the crypto industry’s leading technical solution providers (TSPs), regulatory experts and Financial Action Task Force (FATF) regulators came together at an ambitious and historic online summit to discuss the FATF Travel Rule, its recent 12-month review report and latest implementational issues.
The Global Digital Finance (GDF) Travel Rule Summit connected over 250 virtual attendees in a free 2-hour Zoom conference that covered major talking points such as the case for a decentralized vs centralized Travel Rule solution, how to effect interoperability between different TSPs, privacy issues, the recent InterVASP messaging Standard protocol IVMS101 as well as the current global state of crypto regulations.
Every major Travel Rule solution provider came to the table, including Sygna Bridge (Elsa Madrolle), Shyft (Joseph Weinberg), Netki (Justin Newton), TRISA, OpenVASP, Notabene and more.
The summit also featured valuable input from Coinbase chief compliance officer (CCO) Jeff Horowitz, FATF advisor Takehi Habuchi (Japan’s FSA) and Herve Francois from ING.
Moderator duties were shared between Lawrence Wintermeyer (GDF co-chair), Malcolm Wright (GDF Advisory Council chair) and Sian Jones (XReg Senior Partner and InterVASP convener).
Key Takeaways at GDF Travel Rule Summit:
- Mr Habuchi made it clear that the FATF’s new 12-month review allowance is not an extension for VASPs to drag their feet on the Travel Rule, but a final deadline. After June 2021 the FATF expects the whole VASP industry to be fully compliant with its Standards.
- To centralize or decentralize: There is a very strong debate within the crypto community on whether to adopt a centralized or decentralized Travel Rule solution.
- No Travel Rule solution is viewed as fully global yet, given that many jurisdictions have yet to issue regulation
- The “sunrise” problem of jurisdictions having different agendas and timetables is a concern, as less than 40 of the 200+ FATF countries have created a regulatory framework to accommodate the Travel Rule.
- There is a growing urgency to establish interoperability between TSP solutions.
- Most solutions currently have very little actionable live data
- Jurisdictional differences matter and will become increasingly important, such as GDPR exposure.
Elsa Madrolle explains Sygna Bridge
During the panel discussion “The Known World: Answering the remaining questions”, Elsa Madrolle, CoolBitX International Manager, highlighted the different approach that CoolBitX has taken compared to its peers, choosing to move Travel Rule data offline via a SWIFT-like network.
“No need for data to reside on blockchain”
Madrolle explained that after consulting with various VASPs, CoolBitX found there was no need to specifically have personal data reside on the blockchain. Sygna Bridge will instead share the governance of the network between founding and future VASP members. (view Sygna Bridge FAQs here)
In order to use Sygna Bridge, a VASP has to apply to join the network. Next, Sygna Bridge will perform due diligence before accepting the VASP into the network, after which the VASP will integrate its systems with Sygna’s API (a duration of 2-4 weeks).
The VASP will receive a unique member code and private and public keys that will give them access to privacy-secure tunnels for the transmission of their required encrypted private data.
Data privacy and transaction screening
CoolBitX has no access to the personal data, as Sygna Bridge merely creates a secure environment for the exchange.
This exchange happens off-chain, and remains separate to the transaction. It gives the beneficiary VASP the chance to screen, accept or reject and possibly stop the transaction if anything is flagged by their system as suspicious.
Sygna’s Q3 plans: IVMS101 Proof-of-Concept data by September
Madrolle concluded by pointing out Sygna Bridge’s progress, live status and Q3 plans:
“…Sygna Bridge is currently live and already in production in 3 countries, with more in the pipeline as the alliance network works through jurisdictional requirements.
We are focusing on building our network and vetting our discovered VASPs, and we’ve started working on interoperability with some of the other TSPs here in the panel.
We have fully integrated the IVMS101 data standard and we will have a Proof of Concept in September 2020 to address VASP discovery outside of Sygna as part of our interoperability program. A global list of VASPs would be very useful in this regard”.Elsa Madrolle, CoolBitX General Manager International
GDF Summit Agenda
- FATF: Presentation of 12 Month Report
- VASP discovery: The unanswered question
- Unseen solution: The Travel Rule protocol
- The Known World: Answering the remaining questions
- KYV: Why Know-Your-VASP matters
- Open floor for questions
Sygna Bridge’s other industry engagements in July 2020
- 7/19 Asia Blockchain Summit- “What’s up with FATF and its travel rule requirements?” panel discussion with Elsa Madrolle, Sian Jones, Joseph Weinberg and others
- 7/29 Japan Crypto-asset Blockchain Association (JCBA):
- Joint Webinar with Sygna Japan and Elliptic Japan (language:Japanese)