Ripple, the strength behind XRP, the third largest digital currency just made a strong move that could provide the best solution to comply with the new set of rules by the Financial Action Task Force (FATF). This move by Ripple is to make a deal with ‘Coinfirm’, a technology startup dealing with regulatory matters in the crypto space.
This partnership will provide seamless modalities to comply with the transparency requirement by the FATF regarding entities considered digital asset operators.
Recently, the FATF, an intergovernmental body that sets the global Anti Money Laundry Standard, updated its regulations to fully monitor and keep track of virtual currencies.
This update consists of forty recommendations, which includes customer’s due diligence and record- keeping, reporting of suspicious transactions, docility, and other measures to discourage money laundering and terrorist financing.
Among all the recommendations, the most controversial is customer’s due diligence and record-keeping, which states that virtual asset service providers (VASPs) should keep a record of both the sender and the recipient of every digital currency transaction completed. Just the same way banks do in wired transfer, known as “travel rule” for transmitting of funds.
Crypto operators will now share information of transactions with each other including names of third parties just like the traditional banking system. This advancement designates how crypto tech developers can provide better ways to provide users identities.
Ripple now has a deal with Coinfirm to shine more light on the stringent rules. The startup’s technology will provide info to crypto users on whether the digital currency has been processed by the ”mixer,” application, a technology which was primarily designed for crypto laundering.
The new information to be provided will not include the real identities associated with public addresses where cryptocurrency is stored. According to Coinfirm CEO Pawel Kuskowski, it will basically exhibit information of whether or not an address is owned by an exchange that is involved in anonymous trading.