Crypto exchange Bitfinex testing new AML compliance tool

Bitfinex, a cryptocurrency exchange, is about to launch an Anti-Money Laundering tool (AML) on its platform.

Wednesday’s announcement by the firm indicated that the company will test a new solution to comply with the “Travel Rule,” which is an AML/Counter Financing of Terrorism regulation that financial institutions have been subject to since it was introduced in 2019 by the Financial Action Task Force.

Bitfinex partnered with compliance startup Notabene to implement its software-as-a-service solution to identify virtual asset accounts, track cross-border transactions and comply with other broad obligations of Virtual Asset Service Providers (VASPs). This integration will allow the firm to protect privacy while collecting and managing Travel Rule data.

The solution will allow Bitfinex to send, receive, and share counterparty information with any counterparties that use the same infrastructure. Bitfinex’s sister firm Tether, which manages the largest stablecoin Tether (USDT), also uses Notabene’s solution.

Tether’s chief technology officer Paolo Ardoino stated that Bitfinex and Tether have “always played a leading role” in complying with new regulatory requirements.

Pelle Braendgaard, CEO of Notabene, told Cointelegraph that Notabene launched its travel rule solution on August 2020. The service currently processes transactions between at most 50 exchanges, including Paxful and Luno as well as BitSo, OnChain Custodian, BitSo, Luno and BitSo.

Notabene has been conducting tests in many jurisdictions, including a pilot for the Financial Services Regulatory Authority of Abu Dhabi Global Market (FSRA) in October.

“With this updated Guidance FATF is increasing their urgency while also acknowledging real-world issues VASPs have raised over the past year to them. Braendgaard stated that they now recommend that regulators be flexible in the initial rollout.

Related: Bank of Spain issues registration guidance for crypto services

Braendgaard stated that compliance with the Travel Rule is increasing rapidly each quarter and that the firm expects major VASPs comply by the end of the first quarter 2022.

The FATF has been working to improve the framework and adapt it for the growing cryptocurrency market since releasing the crypto Travel Rule over two years ago. The authority released a February review document to modify its Travel Rule guidance regarding stablecoins as well as crypto peer-to-peer transaction.

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