the Financial Action Group (GAFI), the global organization to combat money laundering and terrorist financing, released requirements for virtual asset service providers or VASP in 2019. The guidelines required that intermediaries maintain information about digital asset transactions of buyers and sellers – called the travel rule. The crypto industry was in an uproar at first, but then realized that it was better to move on. Earlier this year, the G20 called for the implementation of these new rules and, therefore, trade, etc. are now striving to comply
This week, a coalition of international blockchain industry organizations developed a new technical standard, known as “IVMS101To facilitate the exchange of data between the VASPs. Approving a standard would be a crucial step towards meeting the travel rule obligations.
Developed by the Joint working group for interVASP, a group that has the support of the Digital Chamber of Commerce, Global digital finance, and the International Association for the Exchange of Digital Assets (IDAXA), messaging standards (JWG), IVMS101 is a data model designed to enable a common universal language for the communication of required information from the sender and the recipient between VASPs.
The JWG was created in December 2019 and the IVMS101 will now be submitted to major organizations in the blockchain industry for ratification.
Siân Jones, JWG organizer and senior partner at XReg Consulting, who previously served on the FATF policy group that worked on virtual assets, said the group’s decision in such a short time demonstrates how crypto-asset industry can come together:
“In all my years of working on standards, I have never encountered such a huge collaborative effort to enable the development of an international standard in just over four months,” said Jones.
IVMS101 is the first technical standard to be produced by the JWG, which would have met weekly by teleconference from early January 2020 until the closing plenary on May 6, 2020. The group would include more than 130 technical topics. experts appointed by the VASP and other relevant entities, technical solution providers (TSP), academics and regulators.
Anson Zeall, Executive Director of IDAXA, said that since the FATF published the guidelines in 2019, the industry has worked hard to comply, but challenges remain:
“One was to establish a common standard so that any VASP could work with any compliance solution provider with ease. IVMS101 is therefore undoubtedly the first step in the right direction. ”
During the final plenary, several TSPs, including CipherTrace, TRISA, CoolBitX, Notabene and Securrency, committed to implementing the standard. The VASPs, including Onchain Custodian, BC Group and OSL, BitIt, Diginex and Paxful, have also expressed their commitment to implementing solutions based on IVMS101.
Apparently, Lana Schwartzman from Paxful, a P2P crypto market, said it would only take into account IVMS101-compliant TSPs.
“We are now moving from planning and preparation to the execution phase with the TSPs,” said Malcolm Wright, Chairman of the GDF Advisory Board. “IVMS101 is important because it ensures that every message sent is received as expected, and that VASPs will benefit from implementation efficiency and minimum error rates, especially when they may need to adopt multiple TSP solutions for communicate through the VASP ecosystem, “said Wright.
Amy kim, Director of Policy at the Digital Chamber of Commerce, called the deal extraordinary efforts by the industry:
“The work of the JWG has been extremely important in demonstrating the ability of our industry to unite and actively progress towards meeting the requirements of the FATF.”