Sumsub Launches Crypto Regulation Compliance Tool

Summary:
• With governments setting up tight crypto regulations over the past year, Sumsub has launched Travel Rule, which offers full circle compliance.

Sumsub, a provider of security and transaction monitoring solutions, has introduced a new product called Travel Rule to the cryptocurrency market. The product provides a versatile toolkit that keeps track of the entire client journey in handling digital assets. Several nations are preparing to roll out cryptocurrency regulations. For instance, the EU will begin enforcing MiCA by 2024, whereas Dubai is already implementing its rules, and the UK will enact Regulation 5 on crypto asset transactions in September 2023.

How does Travel Rule ensure compliance to regulations?

With the Travel Rule Solution, Virtual Asset Service Providers (VASP) don’t have to worry about keeping up with constantly changing compliance and regulatory requirements. The solution can identify VASP-to-VASP transfers, describe the recipient VASP, determine the account type and execute sanctions violations checks and negative media coverage checks.

Sumsub brings the knowledge and experience to support crypto community compliance infrastructure, having worked with over 500 crypto clients since 2015. The purpose of the Travel Rule is to prevent the use of regulated financial institutions to launder money or fund terrorism. VASPs, as well as digital assets like cryptocurrency are covered wholly by the system. Transfers require both parts to provide and verify each other’s identifier details, as well as share any relevant information with the appropriate authorities.

The system is compatible with Sumsub’s high-tech transaction monitoring solution built on the Know Your Transaction (KYT) mechanism. KYT refers to an adaptable collection of procedures that often involves analysing sender/recipient profiles, computing risk scores, and cross-checking KYC and transactionn data. This ensures that all participants in a crypto transaction are safe from fraudulent activities.

Sumsub’s innovative solution enables VASPs to focus on building their businesses, while ensuring that they comply with the applicable laws. In addition, clients using Sumsub have control over their risk management procedures. This is because the toolkit can be set up to automatically execute transactions with counterparties according to internal risk criteria. They can then simply prepare reports and do risk assessments using the most current data available.