Ciphertrace and CoolBitX announce interoperability PoC for VASPs

By Edil Corneille

CoolBitX’s Sygna Bridge and the Travel Rule Information Sharing Alliance (TRISA) from Ciphertrace have announced a proof-of-concept (PoC) to demonstrate interoperability between their systems as they lead information sharing platforms designed for Virtual Asset Service Providers (VASPs) to meet FATF Recommendation 16’s “Travel Rule”. During the June 2020 FATF plenary, the FATF highlighted interoperability of travel rule solutions as a crucial development needed for the industry. The Sygna Bridge and TRISA interoperability PoC was designed to address several core challenges faced by VASPs and Travel Rule solution providers so that the platforms may communicate with each other in a compliant way, despite any fundamental differences between them.

CEO of CoolBitX and creator of Sygna Bridge, Michael Ou said, “In the last few years, several innovative solutions have appeared to help crypto and virtual asset businesses comply with anti-money laundering regulations that are beginning to develop around the world—each addressing the needs of different audiences. At the end of the day, money-laundering and terrorist financing are global issues that require the collaboration between different entities. This all begins with ensuring that the solutions are able to communicate effectively between each other. By adapting industry standards such as the IVMS101 and building tools to ensure correct translation and connectivity, Sygna Bridge and TRISA are working together to ensure that the cryptocurrency industry is growing and maturing in a positive direction.”

Firstly, the different platforms must be able to identify and verify each counterparty VASPs. Secondly, personal data must remain encrypted throughout the information sharing process across different platforms. Thirdly, data transfer workflow must be clear despite the difference in formatting between the two platforms.

Through a combination of each solutions’ VASP directories, robust data encryption, adoption of the InterVASP Messaging Standard (IVMS101), and the Sygna Gateway—specifically created by CoolBitX to handle message translation and connectivity—VASPs between the two solutions can communicate compliance data seamlessly with minimal disruption. The Sygna Bridge and TRISA interoperability PoC is now available to the public on GitHub.

John Jefferies, Chairman of TRISA, said, “Achieving global interoperability for Travel Rule compliance across jurisdictions is vital for a successful sunrise phase. We are pleased to enable message interoperability and extend mutual VASP authentication in this Travel Rule proof of concept. We are happy to welcome Sygna and Sygna VASPs into TRISA’s global community of trust.”

CoolBitX recently released Sygna Bridge 2.0 which supports the InterVASP Messaging Standard (IVMS101), the Joint Working Group’s unifying messaging standard, which comes after months of technical improvements and rigorous testing with VASP partners in Japan, Korea, and Taiwan. In February 2020, CoolBitX announced the successful closure of its US$16.75 million Series B funding round, led by SBI Holdings, with participation from the National Development Fund of Taiwan, Bitsonic, and Monex. A total of 21 exchanges have signed Memorandums of Understandings (MOUs) with CoolBitX to begin or consider implementing Sygna Bridge, including 6 licensed VASPs from Japan, 1 global exchange group and other VASPs based in Canada, Hong Kong, Japan, Korea, Singapore, Taiwan, United Kingdom, and South Africa.