2023-09-01 21:17:22
Sumsub, the global full-cycle verification platform, is offering a free six-month trial of its compliance solution Travel Rules – device that obliges cryptocurrency companies to collect, verify and share information about transfers. From September 1st, the product will be available to global cryptocurrency organizations, coinciding with the date when the historic UK legislation takes effect. Crypto Travel Ruleto further combat money laundering and terrorist financing in the industry.
The Travel Rules meet the FATF Recommendation 16 (Financial Action Task Force) on wire transfers in the context of virtual assets (VA), requiring cryptographic companies, collectively referred to as VASPs (Virtual Asset Service Providers), as well as financial institutions involved in VA transfers, to be responsible for tracking, recording and communicating sender and receiver when cryptographic transactions exceed a certain amount designated by the member states of the group.
In Brazil, the Legal Framework of Cryptoassets came into force recently, including, in Article 171 of the Penal Code (which deals with embezzlement), a specific section that makes irregularities involving crypto assets (cryptocurrencies, tokens, stablecoins) a crime. The crime of fraud with the use of virtual assets was defined as “organizing, managing, offering or distributing portfolios or intermediating operations involving virtual assets, securities or any financial assets in order to obtain an illicit advantage, to the detriment of others, inducing or keeping someone in error, by artifice, ruse or any other fraudulent means”.
Also in March, Sumsub had already presented the initial Travel Rules solution, which – from now on and for the next six months – can be used to facilitate secure transfers of information between VASPs in accordance with compliance requirements. The free trial plan gives you access to a single console to create up to 10,000 outbound transactions and process unlimited inbound transactions, perform free AML checks, and configure unlimited rules that reflect each customer’s regulatory and business requirements. In addition, the platform also starts to offer additional options of premium and enterprise plans with increased limits for outgoing transactions and several other features.
It is worth noting that if a company fails to comply with the Travel Rule, it could face country-specific local, regional or national regulatory sanctions. Anti-money laundering (AML) penalties on a global scale have registered a 50% increase in 2022, totaling nearly $5 billion, as a result of 3,495 reported events. Financial institutions that failed to successfully operate their customer knowledge (KYC) processes suffered the biggest fines ever.
In the context of the recent market upheaval, with the challenges faced by major cryptocurrency exchanges, some countries are taking decisive steps to tighten regulations and provide clarity to the evolving industry. But, according to FATF, there is still much to be done. Search carried out in 2022 revealed that, of the 98 jurisdictions associated with the group, only 29 countries had adopted specific legislation and, of these, only 11 had started an inspection process.
“Addressing the compliance challenges posed by the Travel Rules requires a collective effort from everyone in the crypto industry, be it regulators, crypto companies, users themselves and verification platforms. Compliance will play a key role in promoting trust and transparency for the crypto industry within an increasingly complex regulatory landscape,” says Jacob Sever, co-founder and chief innovation officer at Sumsub.
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