Michael Ou, the Founder of the CoolBitX, has said that regulators in Asia are leading the way for Financial Action Task Force (FATF) travel rule, which is due to be accomplished in June 2020.
It has been reported that the startup has developed a solution to the travel rule, called Sygna Bridge, which allows exchanges to communicate the identities of the senders and receivers of each transaction.
However, on May 7, it has been announced that it had conducted a series of cross-border transfer tests that demonstrated Sygna Bridge’s effectiveness in complying with the FATF guidelines by verifying transactions against the names of known terrorists and drug dealers.
Ou said that Singapore and South Korea have the best regulatory oversight in the lead up to the travel rule being reviewed in a few weeks.
He added:
“Asia is on the path to change the [crypto] industry and may provide a blueprint for the rest of the world.”
Also, he noted Singapore’s Payment Services Act and South Korean legislation amending the Act on Reporting and Using Specified Financial Transaction Information, as examples of regulators who were prepared for the travel rule.
As FATF’s review of AML and ATF regulations goes into effect in June 2020, regulatory bodies in Asia are well prepared https://t.co/PbVK6AKvfz — Cointelegraph (@Cointelegraph) May 14, 2020
As per the report, Japan, as the world’s third-largest economy, has seen major financial institutions such as Nomura, SBI Holdings, and Rakuten making significant investments into the Japanese crypto market.
Ou said that Japan must also play a large role in regulating virtual asset service providers (VASPs) by adding:
“It is expected that the soon-to-be-published mutual evaluation report for Japan will also focus on compliance of VASPs with the FATF Recommendations. It would be helpful to other countries if the regulators in Japan, a country seen by many as being at the forefront of digital asset adoption, could demonstrate the measures employed to ensure VASPs comply with FATF’s recommendations.”
In the meantime, InterVASP has released a new messaging standard to facilitate the exchange of data between VASPs. If effective, it would also help the firm comply with AML regulations from the FATF.
Likewise, the FATF said that it would “monitor implementation of the new requirements by countries and service providers and conduct a 12-month review in June 2020” by giving the crypto community a year to catch up.
Thus, Ou concluded:
“The vast majority [of crypto exchanges around the world] are still facing challenges. I would imagine that most exchanges — at least those in FATF countries — are looking at ways to comply with the ‘Travel Rules’. However, there are additional complications as countries are at different levels of maturity when it comes to regulatory development. Some regulations may go beyond the FATF requirements, and without clear regulations, exchanges may be hesitant to implement a solution.”
Source: Cointelegraph | Image: Catchpoint Blog