New digital currency messaging standard rolled out for FATF compliance

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A new messaging standard developed by digital currency firms has been published, in the latest industry response to anti-money laundering requirements.

The standard, dubbed IVSM101, was developed to respond to the so-called travel rule instigated by global regulatory body the Financial Action Task Force (FATF).

The standard means transactions will now include identification of pseudonymous senders and receivers in cryptocurrency transactions, which will travel between different exchanges tagged to the specific transactions and parties involved.

The International Digital Asset Exchange Association, which commended the standard, described the model as a “step in the right direction.”

“Since the FATF published the Virtual Asset guidelines in June 2019, the industry has been working hard to comply with the guidelines, but there are challenges,” the association said, according to reports. “One of them was establishing a common standard so any Virtual Asset Service Provider can work with any compliance solution vendor with ease. Coming up with the Intervasp Messaging Standard 101 (IVMS101) as a common standard is definitely the first step in the right direction.”

Malcolm Wright, head of the AML Working Group at GDF, said: “We are coming at it from opposite ends towards the same goal, and we are not quite there yet. So can a VASP that’s licensed somewhere talk to a VASP that’s in an unlicensed jurisdiction? That’s an interesting challenge. But we have got a really nice dialogue with FATF at the moment talking about the sunrise period.”