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​Binance Deploys Shyft Network’s Veriscope to Support FATF Travel Rule Compliance

2021-08-17

At Binance, we have always held ourselves to the highest standard to safeguard users’ interests, and to that end we are always expanding our capabilities to make Binance and the wider industry a safer place for all participants. In this vein, we are excited to announce that we are beginning the phased deployment of Shyft Network’s Veriscope, a decentralized compliance framework and smart-contract platform for VASPs to enable FATF Travel Rule compliance.

Veriscope is the result of a collective effort of Binance and other crypto industry leaders to collaboratively build a decentralized solution for global compliance standards, including the FATF’s Travel Rule guidance. Veriscope was designed, built and programmed to assist exchanges to meet these requirements by facilitating address discoverability, and KYC data exchange without unnecessary exposures of user data.

Jonathan Farnell, Director of Compliance at Binance, said: “In order to truly make data transmission systems work at the scale of the largest VASPs today, we need open solutions that provide the highest level of security on behalf of our users. Blockchains enable global systems that address coordination while at the same time ensuring auditability across hundreds of countries, millions of users, and billions of transactions. Coming together as a global coalition to deploy this solution ensures the rest of the industry has a unified standard, and an open architecture, to help everyone meet global regulatory requirements. It is our responsibility to give clarity, lead regulatory standardization during this transition phase, while also helping smaller VASPs to define secure data requirements that sit at the forefront of regulatory transformation.” 

By linking user consent-permissioning with VASP-to-VASP data transmission, Veriscope’s design ensures VASPs can determine the difference between honest transactions and  data attacks while maintaining GDPR requirements and  a trustless audit trail across counterparties. This coordination architecture eliminates the reliance on centralized trust and long-term reconciliation with counterparty VASPs that may or may not exist in the future.

To ensure Veriscope’s adoption across the industry, Binance and other industry participants also created the Veriscope Governance Task Force. Chaired by Binance’s compliance advisors and former FATF executives Rick McDonell and Josee Nadeau, the Task Force came together to collaboratively work on governance requirements for counterparty onboarding, information indexing, and Know Your Business (KYB). 

Regarding the Task Force, Rick McDonell said: “all systems require a reliable governance framework and workable operational rules. This is true for both the real world and the virtual world. But while the real world has had a long history of devising systems the virtual world has not. This is especially the case in the transfer of money or value which, with new technologies, allows instant transfers but has not had the balancing rules for compliance with global standards and national regulatory requirements. This is now changing with the launch of the collaborative Veriscope system which bridges the gap between highly efficient technology and the need to provide accurate, timely and protected compliance information.”