Phased Deployment of Veriscope on Shyft Network
Shyft Core, in collaboration with Binance, Deribit, Bitfinex, BitMEX, Tether, Huobi and other collaborating Virtual Asset Service Providers (VASPs), announced the launch of Veriscope, a decentralized compliance framework and smart-contract platform for VASPs to enable travel rule compliance.
Participating exchanges are collectively initiating the phased deployment of Veriscope on the Shyft Network, a decentralized infrastructure designed to aggregate and embed trust, validation and discoverability into data stored on public and private ecosystems.
“In 2019, the FATF tasked the industry to develop a technical response to the Travel Rule (Recommendation 16). This was no easy task as there are a number of technical challenges to doing so — particularly discovery of who a counterparty VASP is to a transaction. The Veriscope solution provides for an answer to this problem that causes the least customer friction, whilst at the same time respecting data privacy, data consent, and security to the greatest extent.”
— Malcolm Wright, Chief Compliance Officer at BitMEX and Chair of the Advisory Council at Global Digital Finance
Veriscope is the result of a collective effort of some of the largest exchanges (by global volume), set out to collaboratively build a decentralized solution for global compliance standards, including the FATF’s Travel Rule guidance. Veriscope was designed, built and programmed to assist exchanges to meet these requirements by facilitating address discoverability, and KYC data exchange without unnecessary exposures of user’s data.
“In order to truly make data transmission systems work at the scale of the largest VASPs today, we need open solutions that provide the highest level of security on behalf of our users. Blockchains enable global systems that address coordination while at the same time ensuring auditability across hundreds of countries, millions of users, and billions of transactions. Coming together as a global coalition to deploy this solution ensures the rest of the industry has a unified standard, and an open architecture, to help everyone meet global regulatory requirements. It is our responsibility to give clarity, lead regulatory standardization during this transition phase, while also helping smaller VASPs to define secure data requirements that sit at the forefront of regulatory transformation.”
— Jonathan Farnell, Director of Compliance at Binance
To ensure Veriscope’s success, the participating exchanges also created the Veriscope Governance Task Force. Chaired by Rick McDonell, former Executive Secretary to the FATF, and Josee Nadeau, former head of the Canadian delegation to the FATF, the Task Force came together to collaboratively work on governance requirements for counterparty onboarding, information indexing, and Know Your Business (KYB).
Regarding the Task Force, Rick McDonell said: “all systems require a reliable governance framework and workable operational rules. This is true for both the real world and the virtual world. But while the real world has had a long history of devising systems the virtual world has not. This is especially the case in the transfer of money or value which, with new technologies, allows instant transfers but has not had the balancing rules for compliance with global standards and national regulatory requirements. This is now changing with the launch of the collaborative Veriscope system which bridges the gap between highly efficient technology and the need to provide accurate, timely and protected compliance information.”
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