In Banking First, ING Develops FATF-Friendly Protocol for Tracking Crypto Transfers

ING Bank, a Netherlands-based lender with a penchant for blockchain, has developed a protocol that supports the Financial Action Task Force's travel rule for crypto exchanges and companies trading digital assets.
The solution initiated by ING - currently known as the Travel Rule Protocol or TRP - was also supported by Standard Chartered Bank, Fidelity Digital Assets and BitGo as well as a number of other well-known companies from the crypto space.
The FATF's recommendation in October 2018 to include virtual asset service providers (VASPs) within the scope of its anti-money laundering mandate has resulted in a number of technical solutions and a messaging standard.
Related: Blockchain Bites: PayPals Push, FATF rules and "overrated" scales
However, this is the first time that a bank has been involved in a Crypto Travel Rule solution.
"As an innovation leader for blockchain / DLT, ING sees increasing opportunities in terms of digital assets for both asset-backed and native security tokens," Hervé Francois, head of the blockchain initiative for digital assets at ING, told CoinDesk in an e- Mail. "With a regulatory first approach, we are actively participating in various working groups to support the standardization of this emerging ecosystem and ultimately to promote mass acceptance."
Read more: As part of the standard competition to implement the FATF travel rule
The institutionally aligned TRP was also partially supported by the InterVASP Working Group, which published the IVMS-101 standard, which allows VASPs to agree on the format of the message payload that their solutions broadcast.
Related topics: Identity start Notabene launches the Exchange tool to comply with FATF travel rules
According to a TRP document from CoinDesk:
“We propose a collaboratively managed infrastructure that allows VASP members to query the presence of address entries. An address entry is defined, among other things, by an LEI (Legal Entity Identifier) ​​and information on public keys. "
Standard Chartered and Fidelity did not return any comments at the time of printing.
A source near ING said the bank started looking for solutions to FATF's “Recommendation 16” for digital assets last year.
The plan was to "get an understanding of where the industry is going and see what opportunities banks will have if they can play in that area," the source said.
"To be clear, ING doesn't want to do anything with crypto assets and payment tokens like Bitcoin," the source said. "At the moment the focus is more on security tokens and similar things."
Bank game
The protocol has a RESTful API (Representational State Transfer) with which data can be transferred from one place to another on the Internet. The participating VASPs must be able to publish address entries. In this way, they link an identity and data that are linked to this address entry.
"It could be better compared to SWIFT," said the bank source, referring to the interbank messaging system that has existed since the 1970s. "It could be used for private purposes or as open source code and used by people as a way to share this transaction information."
ING is known for being very innovative with regard to blockchain and for dealing intensively with data protection technologies such as knowledge-free evidence. But that has always been on the corporate side.
Read more: ING Bank brings Bitcoin bulletproofs to private blockchains
This “experiment” of the travel rule shows that banks like ING and the UK-based Standard Chartered Bank are quietly approaching the world of crypto and regulated virtual asset service providers (VASPs).
Ben Chan, CTO of BitGo, said in an email:
“BitGo said its company is committed to providing its customers with a single travel compliance solution and will incorporate multiple protocols to achieve this. We support the TRP solution because it is open, transparent and simple and enables us to offer customers a solution quickly and to meet the requirements of the FinCEN travel rule. "
According to the paper, other participants in the TRP working group are Crypto Broker AG, Metaco, 21 Analytics and the OSL / BC Group.
Pelle Braendgaard, CEO of the recently launched FATF travel rule solution Notabene, said his team will support ING's TRP solution.
"Judging by the members, the protocol will likely be important," said Braendgaard.
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In Banking First, ING is developing a FATF-friendly protocol for tracking crypto transfers
In Banking First, ING is developing a FATF-friendly protocol for tracking crypto transfers

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