Crypto Exchange BitMX has unveiled a framework of policies for how best best batches can store transactional Provence data, to face a necessary exchange as part of the new Anti-Money Laundering (AML) rules.
In order to keep pace with the rest of the financial system, Virtual Resource Service Providers (VASPs) have been asked to receive, retain and exchange information about the promoters and beneficiaries of the transaction, known as “travel rules”. The global anti-money laundering watchdog, the Financial Action Task Force (FATF), expects the crypto industry to implement the new rule by June 2021.
The response of the crypto industry EnthusiasticData Pay-Load is a widely accepted standard for formatting VASSPs (known as the InterVASP messaging standard, of course, or IVMS 101), As well as a number of technical solutions focused on how to enforce the rules created by crypto companies, Banking and consolidation.
According to Malcolm Wright, chief compliance officer at 100x Group, which owns Bitmax, less attention has been paid to how all this additional customer data should be stored.
“Solution providers are focusing on data transfers to ensure they are immediate and secure,” Wright said in an interview. “But what happens when the data actually arrives at its destination? How can you ensure that it is stored securely and in the right way? ”
Wright, who has led the development of data-storage policies (and was instrumental in working with Xian Jones of Xreg Consulting to create the IVMS101 standard), decided to hire BitMX’s seasoned security experts with the intention of “starting a conversation” around. Data storage through open-source projects that industries and regulators can pin down.
“Complete this kind of puzzle,” Wright said. “You have the IVMS standard for formatting data. You have the protocol provider who will send the data. And then there are some policies around storing your data.”
Last year’s Seychelles-based BitMX spotlighted the company after the U.S. authorities took effective action on a weak compliance system, where arrest warrants were issued for several senior executives and co-founders.
The owner of Bitmax hired 100x Group Wright, formerly Disneyx’s compliance chief, in October 2020. Since then, the firm’s AML / KYC processes have been revised, starting with Any removal Historical non-KY accounts on the platform.
Bitmax’s travel rule data storage policies focus on issues such as access management, encryption standards, and the separation of travel rule data from other operational customer data.
Like the IVMS101 messaging standard, Wright believes that this security measure will grease more cycles in enforcing the FATF order, which may involve VASPs looking at each other due to being sidelined with some technical solutions.
“So if Bitmax decides to exchange data with another VASP, we can say, ‘Are you managing this kind of minimum set?’ So it helps build trust among VASPs that they can work together, ”Wright said.