CipherTrace, Shyft partner to develop new blockchain solution to ensure compliance with FATF rules

Blockchain security company CipherTrace is going to roll out a new solution, which is intended to help cryptocurrency firms comply better with the new Financial Action Task Force (FATF) guidelines.

In order to come up with the new solution, CipherTrace partnered with the security platform, Shyft. The latter is basically developing a blockchain platform for identification and attestation, Coindesk reports.

The new solution will help ensure FATF compliance as well as user privacy, the companies said.

According to the press release, CipherTrace and Shyft will develop a shared smart-contract and cryptographic access controls between cryptocurrency exchanges that manage access to private details. The objective is to make KYC and AML processes faster, more efficient and open, while maintaining a high level of privacy and only revealing identity information when compelled to do so by legal authorities.

“Our focus is on creating federated standards for identity, which are blockchain agnostic,” Shift founder Joseph Weinberg said. “We make sure KYC checks can be transferred across networks in a secure manner without compromising identity information. This program bridges a critical gap between new regulatory standards and existing exchange operations to greatly strengthen the crypto ecosystem with a practical implementation of the FATF’s Travel Rule.”

CipherTrace CEO Dave Jevans also talked about how this partnership will affect their services. Suffice it to say, security compliance while maintaining anonymity is the larger goal.

“With cryptographically controlled privacy mechanisms, it is possible to have both anonymity and responsible disclosure of the source of funds for legitimate purposes such as criminal or terrorist investigations and AML compliance,” Jevans said. “This is the direction that CipherTrace is working on for the future growth of cryptocurrencies globally. We believe that there are technological and regulatory solutions that can preserve privacy while enabling security and compliance.”