Digital Currency Messaging Standard for FATF Compliance

News / 09.05.2020

Digital currency companies are responding to anti-money laundering requirements of the Financial Action Task Force (FATF). The latest response to the requirements involved the development of a new messaging standard. The new messaging standard is known as IVSM101.

Two months to the end of 2018, the FATF was able to adopt changes to its recommendations to explicitly clarify that they apply to financial activities involving virtual assets (VA). This led to the expansion of the scope of the recommendations to apply to virtual asset service providers (VASPs) and other obliged entities engaging in or providing covered VA activities.

This led to the establishment of the Joint Working Group on interVASP Messaging Standards (JWG) in December 2019. The JWG comprises of more than 130 technical experts globally who came up with the interVASP Messaging Standard IVMS101 which is a global common language used to communicate required originator and beneficiary information between VASPs.

At the moment, part of the standard is the identification of pseudonymous senders and receivers in cryptocurrency transactions, which will travel between different exchanges tagged to the specific transactions and parties involved.

According to the International Digital Asset Exchange Association, the model is a step in the right direction. The association noted the industry’s efforts to ensure compliance with Virtual Asset guidelines released by the FATF since June last year. Among them is the establishment of a universal standard for any Virtual Asset Service Provider to work with any compliance solution vendor easily.

In the words of Malcolm Wright of the AML Working Group at GDF, work is ongoing until the goal is achieved. He continued as follows:

“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.”

Source: Cryptopress.

avatar
Dacosta Osei-Tutu, a first degree holder in Nursing, who couples his Nursing career with blockchain blogging, has a great passion for the blockchain technology and aims to play a vital role in applying this revolutionary technology to disrupt the healthcare system in Africa.