Next Step In Virtual Asset Adoption by Traditional Finance
● Builds on previous Travel Rule Protocol version 1.1.0 by adding easy to use workflow for end users while solving the “discoverability” problem
● Provides simple way for Virtual Asset Service Providers to comply with FATF recommendations without putting additional burden on end users
Global Release - 17 June 2021 — The Travel Rule Protocol Working Group (TRP Working Group), a global independent industry body of leading virtual asset service providers (VASPs) dedicated to creating standards that adhere to the Financial Action Task Force’s (FATF) R.16 Travel Rule recommendations, is pleased to announce today that it has published Version 2.0.0 of its standard Inter-VASP messaging API for Travel Rule data exchange (TRP API).
The free, easy-to-use standard for communications between VASPs encourages mainstream adoption of virtual assets by enabling compliance with anti-money-laundering (AML), counter-terrorism-financing and know-your customer (KYC) protocols in line with the FATF’s recommendations. Due to its simplicity, implementation of the TRP API can be completed rapidly, and allows VASPs to integrate the API directly into existing systems. A number of TRP Working Group members have created implementations of the TRP API that can be utilized immediately.
The TRP Version 2.0.0 builds upon the previous version 1.1.0 adding a simplified workflow for end users allowing them a familiar user journey, while fully complying with the FATF recommendations. Version 2.0.0 adds the ability for VASPs to create a very simple end user workflow, which helps the user provide all the information necessary for the VASP to comply with the FATF recommendations and bypasses the need for a seperate “VASP discoverability mechanism”.
“It was important to the TRP Working Group that the end user experience was as easy as possible, and no more difficult than typical existing pre-Travel Rule industry practises” said Andrew Davidson, the TRP Working Group chair. “We decided to adopt a workflow based on the existing LNURL standard, a bech32-encoded query string from the Lightning Network. The solution can be used with any virtual asset and gives the VASP a lot of flexibility to tailor it to their user’s needs while making an easy to implement or adopt solution”
“With the LNURL-based workflow, we have allowed end users to have an almost identical user experience to that they are used to with existing Virtual Asset platforms, while at the same time being compliant with the FATF recommendations and bypassing the complexity of the VASP discoverability”.
“For the end user the experience is very familiar” said Harm Aarts, from 21 Analytics, one of the key members of TRPWG, an independent software vendor who sells compliance solutions to VASPs and other financial institutions. “Instead of copying the blockchain address between VASPs deposit and withdrawal screens, or scanning address QR codes, they just copy and paste the encoded TRP 2.0.0 LNURL, or scan the TRP 2.0.0 LNURL QR code.”
Christopher Kiew-Smith, Chief Compliance Officer, Zodia and member of the TRPWG - “Zodia remains a strong proponent of the reliable and efficient delivery of important regulatory obligations such as the Travel Rule. Transactional transparency in virtual assets is a crucial means of combating financial crime such as money laundering, terrorist financing and the sale of illicit products and services. The latest update to TRP 2.0 allows us and the virtual assets ecosystem as a whole to offer even safer services and protect our clients from criminal third parties.”
As more and more jurisdictions implement regulations which are aligned with the FATF Travel Rule recommendations it is expected that many existing VASPs and new entrants into the expanding Virtual Asset space will need to adopt a Travel Rule solution very soon, so the publication of the latest version of Travel Rule Protocol is very timely for the industry.
About the Travel Rule Protocol Working Group
The Travel Rule Protocol Working Group (TRP Working Group), a global, open independent, non-profit industry body of more than 25 leading virtual asset service providers (VASPs) across more than 10 Financial Industry Task Force (FATF) member jurisdictions. The Group includes pioneering VASPs, banks, investment firms and other members including OSL, Zodia Custody, ING, 21 Analytics, Notabene and XReg among others.
The Group’s main goal is the creation of a pragmatic protocol for compliance with the FATF Travel Rule particularly during the so called “Sunrise Period”.
The industry Working Group has regular weekly meetings, and is open to new members. Industry participants that wish to join the Group, can inquire at: