CoolBitX and Elliptic announce solutions for virtual asset service providers

By Edil Corneille

CoolBitX, a Taipei-based blockchain security company, and London-based Elliptic, a crypto asset risk management solutions provider, have announced a new partnership. The collaboration enables customers with a complete solution to fulfill anti-money laundering (AML) and compliance obligations – including the Financial Action Task Force (FATF) Travel Rule, which has a 12-month review on June 2021.

The collaboration between the two partners will see what is said to be the industry’s first operational Travel Rule solution – Sygna Bridge, along with Elliptic’s crypto transaction and wallet screening offered to Virtual Asset Service Providers (VASPs) to comply fully with the FATF’s AML and combat the finance of terrorism (CFT) regulations.

On July 7, 2020, the Financial Action Task Force (FATF) released its highly anticipated report describing the conclusions of its 12-month review that assessed the progress that countries and the private sector have made in implementing its guidance on virtual assets.

Michael Ou, CEO, CoolBitX expounded, “The blockchain and cryptocurrency industry is at a major crossroad. As the Financial Action Task Force (FATF) continues to push its cryptocurrency guidance across the globe, compliance and preventing criminal activity can feel extremely daunting for VASPs. The truth is, ‘Travel Rule’ compliance and blockchain analytics to track criminal activity are two sides of the same coin. Having just one or another paints an incomplete picture. Elliptic’s reputation for helping financial institutions and cryptoasset companies to manage risk through their tracking tools is second to none. With the full range of tools from Sygna and Elliptic, we are thrilled to provide clients with the ability to protect themselves from violating any AML/CFT laws and regulations, allow them to assist regulators to combat illicit money laundering activities, and stay compliant with changing regulations.”

The FATF reviewed the global progress of the Travel Rule in its recent plenary on 24 June 2020 and subsequently released its highly anticipated report, the FATF’s 12-Month Review of the Revised FATF Standards on Virtual Assets and Virtual Asset Service Providers, that assessed the progress that countries and the private sector have made in implementing its guidance on virtual assets.

In a series of tests and cross-border transfers between SBI VC, Bitsonic, and BitoPro audited by a Big 4 accounting firm, the Sygna Bridge platform is said to have demonstrated its effectiveness as a cross-border ‘Travel Rule’ solution. Findings were presented in April 2020 to members of the FATF Contact Group. Sygna Bridge is now recognised as an enterprise-ready technical solution for VASPs to meet Travel Rule obligations.

“The July 2020 FATF report highlights, among other things, that it won’t accept claims of technical infeasibility as an excuse for non-compliance with the Travel Rule – and that it expects VASPs to implement solutions,” David Carlisle, Head of Policy and Regulatory Affairs, Elliptic apprised. “Now through our partnership with CoolBitX, we can offer customers Sygna Bridge alongside Elliptic’s crypto risk monitoring solutions to help VASPs take proactive steps in meeting high AML/CFT standards, wherever they operate.”

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.

Yoshitaka Kitao, CEO, SBI Holdings enthused, “SBI Holdings is delighted to hear of this partnership and as a financial institution, we understand the importance of both regulatory compliance and the need for collaboration within the industry—as it will further drive the mainstream adoption of blockchain technology and virtual assets. The combination of Sygna Bridge and Elliptic’s risk management tools will bring crypto companies with an unprecedented suite of solutions that enables them to comply with FATF guidance and manage risks through tracking analytics.”

CoolBitX recently released Sygna Bridge 2.0 which supports the InterVASP Messaging Standard (IVMS101), the Joint Working Group’s unifying messaging standard, and comes after months of technical improvements and rigorous testing with VASP partners in Japan, Korea, and Taiwan. A total of 18 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, Japan, Korea, Singapore, and Taiwan.