A new platform says it is one of the first in the world to offer full compliance with the Financial Action Task Force’s travel rule.
The FATF guidelines require crypto businesses to collect and share personal data during transactions — effectively imposing the same standards on this burgeoning sector as those expected of the banking industry.
Four months before this rule is set to come into force, the Sovereign Wallet Network has launched the MetaBlock Exchange. Through this platform, every user is given an identity-based wallet so blockchain transfers can be tracked with ease.
Executives say the MetaBlock Exchange offers additional benefits thanks to its design. The platform intends to fully digitize the traditional financial system — all while avoiding the pitfalls of centralization. Users are given a real cryptocurrency wallet, which means they have full custody of their assets at all times. It is hoped that this will substantially reduce the risks of cyberattacks and eliminate some of the other downsides associated with mainstream exchanges.
Other blockchain-based innovations have also been rolled out in the new exchange. One of them is a double-booking mechanism, which means every public blockchain transfer has a corresponding private sidechain transfer. Transactions are only confirmed when both systems match up.
According to the MetaBlock Exchange team, this “game-changing” approach makes it extremely difficult for hackers to succeed, as a cybercriminal would need to hack both sides of the double-booking mechanism at the same time. Contrast this with the situation at present, where malicious actors can often steal assets after identifying a single vulnerability in a crypto company’s infrastructure.
Thanks to all of these measures, the team behind the MetaBlock Exchange believes it is in a prime position to satisfy all of the FATF recommendations — delivering a legal and safe marketplace for trading crypto at a time when noncompliant platforms could be at risk of getting shut down.
As Cointelegraph previously reported, crypto businesses have been under pressure to develop a regulatory framework that complies with the travel rule.
Many believe that regulation could legitimize the industry in the eyes of financial institutions and the wider public. A sustainable framework could also foster collaboration and innovation between businesses in a way that hasn’t been seen before.
In formal FATF parlance, the travel rule is known as Recommendation 16. It states that these guidelines are designed for “preventing terrorists and other criminals from having unfettered access to electronically facilitated wire transfers.” The task force suggests that identifying information should be held for all transactions that have a value of $1,000 or more.
Although FATF describes these measures as recommendations, it’s fair to say that these proposals do have teeth. They aren’t legally binding, but countries that fail to comply with the measures risk being excluded from the global financial network, in particularly egregious circumstances. Indeed, the G-20 has also announced that it plans to rely on the FATF to regulate cryptocurrencies when it comes to ensuring they aren’t used for money laundering or to finance terrorism.
As the crypto world and regulators try to reach some consensus, lively debate and tough decisions will lie ahead. Early innovators such as MetaBlock Exchange will be hoping to have a head start — offering certainty to consumers as the industry’s landscape shifts dramatically.
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