Veriscope, a decentralized solution to the Financial Action Task Force (FATF) Travel Rule developed by Shyft Network, has been launched for virtual asset service providers (VASPs).
According to blog post by Shyft Network on Tuesday, August 17, Veriscope is a decentralized compliance framework and smart-contract platform for VASPs to enable travel rule compliance. Shyft has collaborated with some of prominent VASPs to launch Veriscope that include Binance, Deribit, Bitfinex, BitMEX, Tether, and Huobi.
According to cryptocurrency compliance platform Shyft is designed to provide a decentralized solution for global compliance standards, including the FATF’s Travel Rule guidance. Veriscope will assist exchanges and VASPs to meet these requirements by facilitating address discoverability, and KYC data exchange without unnecessary exposures of user’s data.
Issued in 2019, the FATF Travel Rule, also called FATF Recommendation 16, require all VASPs to submit the Personally Identifiable Information (PII related) to all transactions done by their customers with the aim of combatting money laundering attempts through these exchange platforms. Many projects are working to build a solution, such as Sygna Bridge by CoolBitX, and Veriscope is the result of these efforts.
The blog post reads:
“By linking user consent-permissioning with VASP-to-VASP data transmission, Veriscope’s design ensures VASPs can determine the difference between honest transactions and data attacks while maintaining GDPR requirements and a trustless audit trail across counterparties. This coordination architecture eliminates the reliance on centralized trust and long-term reconciliation with counterparty VASPs that may or may not exist in the future.”
The solution currently onboards some 35 crypto service providers. Participating VASPs has begin the phased development of Veriscope on the Shyft Network. According to the website, Shyft, the underlying protocol of Veriscope, is “public blockchain protocol designed to aggregate and embed trust and validation into data stored on public and private ecosystems, and permissioned and permissionless networks.”
The participants also created a Veriscope Governance Task Force, chaired Rick McDonell, former Executive Secretary to the FATF, and Josee Nadeau, former head of the Canadian delegation to the FATF, to “work governance requirements for counterparty onboarding, information indexing, and Know Your Business (KYB).”
Joseph Weinberg, co-founder of Shyft Network, commented:
“The goal of Veriscope was to design a utility that would enable a decentralized coordination system to address global data transmission requirements. In achieving this goal, Veriscope ensures that VASPs maintain full business sovereignty, determines counterparty requirements cross-jurisdictionally, while maintaining a decentralized system that isn’t owned by any one group of VASPs.”
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