Binance, the company behind the largest global cryptocurrency exchange by volume and users, today announced a partnership with Shyft Network to implement its decentralized infrastructure to comply with the Financial Action Task Force (FATF) Travel Rule.
The FATF Travel Rule requires Virtual Asset Service Providers (VASPs) to share Personal Identifiable Information (PII) and Know-Your-Customer (KYC) data between qualifying institutions when executing transactions for senders and receivers. Cryptocurrency exchanges qualify as VASPs, and are required to share this data on behalf of their users.
Shyft Network provides the first end-to-end decentralized solution to the FATF Travel Rule. Shyft Network’s open-source network solution enables counterparties to establish data-sharing rules and meet multi-jurisdictional requirements necessary to fulfill global compliance standards, including the FATF Travel Rule, all while adhering to GDPR and other data privacy guidelines.
In collaboration with other global exchanges, Binance will be the first major integration to drive the deployment of federated coalitions atop of the Shyft Network’s discovery and data-interoperability layers. Deployment of the solution will be shared at a later date with integration testing currently in progress.
Chief Compliance Officer of Binance, Samuel Lim, said “Until now, the industry has not had an existing infrastructure for VASPs to coordinate and comply with the FATF’s new guidelines. Shyft Network’s solution enables VASPs to fully comply with the Travel Rule. The Shyft Network team provides a unique approach in working hand-in-hand with international governments and regulatory bodies–in concert with the network’s established, open-source technology–we believe it is the right solution for ongoing regulatory compliance.”
Shyft Network’s solution ensures VASPs minimize risk and data leakages while enabling total compliance with the Travel Rule; this allows ongoing system operations to occur in regulated environments while maintaining full use of decentralized networks. Exchange databases retain their own privacy-preserving characteristics while meeting modern compliance requirements.
Co-founder of Shyft Network, Joseph Weinberg, stated “Shyft Network was designed to safeguard decentralization and the openness of cryptocurrency networks while simultaneously giving the ability for businesses and users to securely operate in today’s regulatory environment. Together, with global partners like Binance, we aim to drive mass adoption while ensuring that safety, security, and openness are maintained for all protocols and participants.”
Advisor to Shyft Network and former FATF Executive Secretary, Rick McDonell, stated “this partnership is welcome news – it should help to move this nascent but fast-growing industry to the next level when it comes to effectively interfacing with regulators. Other exchanges would be well advised to participate in federations that practically address global compliance requirements, particularly the FATF’s Travel Rule.”
Through partnerships via the Shyft Network, Binance, along with other leading global exchanges, will implement infrastructure used in an open coalition ecosystem for compliance with the FATF guidelines and other regulatory standards.
Ultimately, these federations aim to accelerate universal regulatory compliance, with respect to crypto business globally, while protecting the data and privacy of all cryptocurrency users.