CipherTrace has launched a whitepaper and an open source solution

In June, the Financial Action Task Force issued a series of recommendations for the crypto industry that generated consternation. These include a rule that exchanges communicate confidential customer information with each other. Basically, FATF provides that transactions can not be carried out outside the platform without having clear information about the holder of the respective portfolio. Currently, this provision is impossible to implement because the exchanges have not implemented an information exchange system between them.

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1 TRISA – secure transfer of confidential information

2 FinCEN is already forcing exchanges to comply with FATF rules

2.1 Related posts:

Security company CipherTrace has released a whitepaper and an open source solution that would solve this problem.

TRISA – secure transfer of confidential information

The information sharing architecture proposed by CipherTrace (TRISA) would allow exchanges and wallet providers to share payment details and confidentially change KYC customer information. The software is similar to the secure sockets layer (SSL) protocol used by many sites.

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Basically, each entity will go through a verification system and will receive a certificate from a third party. The exchanges receiving a transaction should, in turn, confirm that they have actually received a transaction with a receipt. Alternatively, I can reject the transaction if one of the parties involved is under penalty or is on a blacklist.

John Jefferies, CipherTrace’s marketing director, explained:

“Although this rule may cause some consternation regarding confidentiality, because it involves exchanging customer data between exchanges, they will eventually be forced to implement it.”

FinCEN is already forcing exchanges to comply with FATF rules

FATF recommendations have not yet been formally adopted by most countries, so their implementation would be a proactive action. However, unconfirmed reports show that in the US, FinCEN is already forcing exchanges to comply with FATF rules.

The US authority published in May a guide imposing its own version of FATF recommendations. The guide, released on May 9, gave the exchanges 180 days to implement the new rules. The deadline expires November 27.

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Unlike FATF recommendations, FinCEN rules have the status of law, so companies can be penalized if they do not comply.

“From what I understood. FinCEN has already started actions against US crypto service providers that do not comply with the new rules. We expect them to be announced publicly soon, ”

Jefferies said.