As much as some cryptocurrency fans would prefer to throw temper tantrums and refuse to accept the truth, digital currency is currency before anything else. As such, it is, and was designed to be, compatible with financial laws governing currency and the transition from a hidden network of payment operations to a legitimate and regulated system continues to move forward.
The Financial Action Task Force (FATF) has set in motion a process to have all crypto transactions recorded and customer information provided and shared, and the world’s G20 has already said it would be willing to accept the guidance. To help crypto companies adapt to the new regulatory framework, CipherTrace has become the latest to offer a solution to help entities comply with the FATF’s “Travel Rule.”
The blockchain security firm published a white paper and software that can be used by wallet providers and exchange platforms in order to follow the FATF’s guidelines. The software facilitates the exchange of information, as recommended by the task force, and provides a solution that some have said wasn’t possible. According to CipherTrace’s chief marketing officer, John Jefferies, many have asserted that it would be impossible to offer a compliant solution, but the company has shown that it can be done.
CipherTrace has been supportive of the FATF’s goals since they were announced a few months ago. The company’s CEO, Dave Jevans, said at the time, “With cryptographically controlled privacy mechanisms, it is possible to have both anonymity and responsible disclosure of the source of funds for legitimate purposes such as criminal or terrorist investigations and AML compliance. This is the direction that CipherTrace is working on for the future growth of cryptocurrencies globally. We believe that there are technological and regulatory solutions that can preserve privacy while enabling security and compliance.”
CipherTrace isn’t the only entity that has come up with a workable solution to the FATF’s policy. Netki announced its own version this week and is providing a “comprehensive solution that doesn’t require a huge investment, and adds zero transaction costs.”
CipherTrace’s solution, the Travel Rule Information Sharing Architecture (TRISA), creates a unique way for two entities to exchange certificates that contain the requisite identification data. It works on top of existing Internet protocols, which makes it affordable to be introduced, and CipherTrace is letting companies take it for a test drive. If any issues are found, changes to the open-source code behind TRISA will be made to address the issues.
As has already been demonstrated on more than a few occasions, the original Bitcoin white paper – the one Satoshi Nakamoto wrote, not the one Bitcoin Core (BTC) developers created – was right on the money in virtually every way. It said that scaling was possible, which BTC said wasn’t, and said that Bitcoin was designed to work within monetary regulatory frameworks, which BTC turned down. As digital currency continues to mature and move toward a legitimate framework, it will receive the support it needs to be seen for what it truly is – a currency, first and foremost.
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