Binance is strengthening its compliance measures after receiving regulatory warnings in multiple jurisdictions. The crypto exchange announced that it has deployed CypherTrace Traveler, which will ensure its compliance with FATF-recommended travel rules.
Traveler performs counterparty due diligence of the virtual asset service providers (VASPs) with the Travel Rule Information Sharing Alliance solution. The system monitors and runs all checks prescribed by the FATF and issues know-your-customer (KYC) certificates.
CypherTrace’s solution automatically identifies VASP-to-VASP transactions and securely verifies the originating and recipient VASPs. Additionally, it ensures the prevention of data leakage by sharing the transaction-related information only with Travel Rule-compliant institutions.
“We are continuing to invest in our compliance program and technology to further strengthen our standards,” said Samuel Lim, Binance’s Chief Compliance Officer. “We are proud to partner with CipherTrace to deploy their Traveler compliance solution. As always, we are committed to providing a superior product for our users, one that is secure, decentralized and meets global compliance standards.”
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Binance has become one of the first cryptocurrency exchanges to deploy CypherTrace Traveler, which was launched in March 2021. The exchange’s urgency to streamline its compliance might also have been pushed by recent regulatory setbacks.
Though Binance claims that it adheres to the required compliances in all its operational jurisdictions, the exchange received multiple regulatory warnings. Most recently, the United Kingdom’s FCA warned against Binance Markets Limited, saying that the company is not authorized to operate in the country. Days before, Japan’s FSA said that Binance is illegally operating in the country.
But, CipherTrace’s solution is more oriented towards tackling the possibilities of money laundering, rather than the exchange’s jurisdictional issues.
“We are confident that Traveler will help Binance to continue to meet the highest standards for global Anti-Money Laundering compliance, particularly as regulation of VASPs tightens in jurisdictions around the world,” said CipherTrade CEO, Dave Jevans.