VerifyVASP will help to increase adoption of LEIs ahead of the upcoming regulatory deadlines across the Asia Pacific region
VerifyVASP can now obtain legal entity identifiers (LEIs) for its virtual asset service provider (VASP) clients “quickly and efficiently”.
The regtech can then add its clients’ LEIs into its messaging service to provide the identification data needed for “easy and early” compliance with current and anticipated regulatory requirements.
One upcoming requirement, the Financial Action Task Force’s (FATF) travel rule, sets out a framework of measures that countries should implement to combat money laundering and terrorist financing.
It obliges VASPs to “obtain, hold and submit” information associated with virtual asset transfers to identify and report suspicious transactions.
The travel rule aims to mitigate the risks associated with the transfer of virtual assets.
By taking on the role of validation agent, VerifyVASP will help to increase adoption of LEIs ahead of the upcoming regulatory deadlines across the Asia Pacific region.
Shihyun Chia, chief executive officer at VerifyVASP, commented: “As a validation agent, we can use LEI data to greatly streamline VASP identification and facilitate counterparty identification, while supporting our clients with early compliance to upcoming regulations.
“Counterparty due diligence is one of the main challenges VASPs face due to the level of information required by the FATF’s travel rule.
“The LEI helps to address this as it delivers consistent, high-quality and globally recognised entity identification which greatly helps both financial market supervisors and participants to assess exposure across marketplaces.”
Sirgoo Lee, chief executive officer of Dunamu, the operator of South Korea’s largest digital asset exchange Upbit, said: “The crypto industry is shaping markets across borders and expanding rapidly.
“It is highly expected that VerifyVASP will enable VASPs and other market participants to build a solid foundation of trust in the global marketplace.”
Stephan Wolf, chief executive officer at GLEIF, added: “There is currently no way to determine if the same VASP is registered with multiple regulators.
“This leads to uncertainty for national authorities as well as all participants in the global financial system. If all jurisdictions identify registered service providers and other intermediaries via the LEI, and the LEI is consistently exchanged across supervisory authorities, we can create a digitally enabled financial ecosystem.”