Cryptocurrency forensics firm, CipherTrace has partnered with attestation platform, Shyft with the ultimate goal of delivering a solution that allows cryptocurrency service providers to meet up with new rules imposed on them by the Financial Action Task Force (FATF).
As Stmarket.co reported, a crucial requirement of the newly introduced FATF rules for crypto service providers is that they share customer data each time the transaction exceeds $1000 or €1000.
Given that transactions that fall into that category would represent a large chunk of crypto transfers, crypto exchanges especially face an uphill in abiding by the FATF rules. Sharing customer data, simultaneously with other exchanges around the globe before the confirmation of a transaction, undoubtedly presents a significant challenge.
CipherTrace and Shyft, however, has disclosed plans to solve that problem and thus profit from rules that most crypto enthusiasts label as too stringent.
According to a press release shared with Bitcoin Magazine, the new partners intend to help crypto platforms to meet the requirement by “developing an anonymous identity protocol which will allow crypto service providers to share information without disclosing user identity.”
The proposed system would reportedly allow these service providers to remain regulatory compliant without giving away so much customer information.
In explaining the technical details of the yet-to-be-launched platform, CipherTrace writes,
“This would resemble something like a zero-knowledge proof, which is a cryptographic function that allows one party to reveal that it knows certain information without conveying the information itself. The solution involves a smart contract platform with shared access between exchanges and other relevant cryptocurrency service companies.”
Although the companies did not reveal a possible launch date for the supposed FATF compliant system, we know that crypto platform has at least one year to fulfill all the requirements that the regulators laid out for them.
With that in mind, one can expect CipherTrace and Shyft to roll out the solution in the coming months.