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Binance will now work with the Shyft Network provides industry-wide solutions to meet the FATF requirements. For this, the network uses its database bridging, identity passporting, and data attestation infrastructure.
As crypto exchange Binance spreads its wing in the global market, it is working on complying with the Financial Action Task Force (FATF) regulations. Recently, Binance joined hands with public blockchain protocol Shyft Network for cross-industry KYC data sharing.
The Shyft Network helps crypto industry players by offering decentralized solutions to fulfill global compliance standards. This also includes complying with the FATF’s “travel rule”. Binance’s chief compliance officer Samuel Lin said that Shyft is the first infrastructure in the crypto space that helps firms to comply with the new FATF rules.
Last year, the FATF upgraded its guidance for Virtual Asset Service Providers (VASPs). This rule makes it mandatory for VASPs to collect and share KYC (know-your-customer) information for transactions. Rick McDonell, former FATF executive secretary and now an advisor to Shyft showered praises over this new partnership. Mr. McDonell said:
“The partnership should help to move this […] industry to the next level when it comes to effectively interfacing with regulators. Other exchanges would be well advised to participate in federations that practically address global compliance requirements, particularly the FATF’s Travel Rule.”
Shyft is an open-source technology that aims at having the full-fledged use of decentralized networks that can establish secure data-sharing principles across different decentralized networks. Furthermore, this technology complies with both – FATF guidelines and the European Union’s GDPR data privacy law.
The Shyft Network is working on having an industrywide solution as per the FATF requirements. To accomplish this goal, the system uses its database bridging, identity passporting, and data attestation infrastructure.
Bitter Experience of Binance with Handling KYC Data
Last summer in august 2019, crypto exchange Binance was a victim of hacking extortion. A miscreant had allegedly gained access to Binance’s large chunk of customers’ KYC data. This also included the leak of over 10,000 personal photos of customers.
Earlier, Binance was using some third-party services to process these KYC verifications. But after this incident, Binance has been working diligently to enhance its infrastructure for storing customer information. Reportedly, Binance’s partnership with Shyft has been an outcome of this incident.
There remains “work to be done by the private sector to develop a technical system that is capable of implementing this rule. We didn’t want FATF to sit down and tell technical details of exactly how companies should comply with it because that would quickly become out of date,” explained Tom Neylan, the FATF secretariat.