New Tech to Make Individual Crypto Transactions KYC-Compliant From Wallets
If more exchanges adopt a new technology that makes the know your customer (KYC) process to be embedded in each users’ wallet, then the days of questioning whether Virtual Asset Service Providers (VASPs) are KYC/AML compliant may be over soon.
The technology, which could also safeguard against any leakage of personal data of users from exchanges, is particularly of interest as some countries are reportedly planning to create a new system to collect and share personal data on individuals who conduct cryptocurrency transactions in line with the Financial Action Task Force (FATF).
A Japanese exchange SBI VC Trade Co., Ltd. (SBI VC) has confirmed it has adopted the CoolWalletX technology by CoolBitX to remove its inefficient and costly burden of the KYC/AML process from the crypto exchange.
CoolBitX used the opportunity to announce the launch of Sygna, an extension of CoolWalletX technology, allowing for fully compliant virtual asset transactions across multiple crypto service providers, individuals, and institutions. Sygna is an FATF-compliant solution that seeks to remove the burden of conducting KYC from exchanges by ensuring that all wallet holders are fully KYC’d through their wallets.
The news comes as one of the world’s top crypto exchanges, Binance, informed its users that an unidentified individual has threatened and harassed it with a demand of 300 BTC to withhold “10,000 photos that bear similarity to Binance KYC data.”
The exchange claims to be “still investigating this case for legitimacy and relevancy” but is willing to offer a reward of up to 25 BTC to anyone who is “able to provide any information to help identify this person and allow us to pursue the individual through legal action”.
The alleged hacker has been distributing the supposed Binance KYC data to the public and media outlets although the exchange insists there are inconsistencies in the published data when compared to theirs hence denying an established link of the exposed KYC images to Binance. It is also investigating a third-party vendor which it contracted for KYC verification around February 2018 which Binance suspects the images displayed were taken.
According to the CEO of CoolBitX, Michael Ou, the partnership it has with SBI VC is “a major step towards safer and more wide-spread cryptocurrency adoption” and is in line with the FATF’s firm KYC/AML guidelines for the virtual asset industry for VASPs to be regulated like financial institutions.
“This partnership with SBI VC is a crucial aspect to having and maintaining better security on the exchange,” says Ou. “Currently, most KYC/AML responsibilities lie with the exchanges to ensure all transactions and individuals are legitimate. CoolBitX is happy to work with SBI VC by providing the CoolXWallet, and help in SBI VC’s effort to implement best practices in the area of KYC/AML for digital assets.”