VerifyVASP, a Singapore-based RegTech solution provider to virtual asset service providers (VASPs), has joined the Global LEI System as a validation agent. The company is the first validation agent to operate exclusively in the crypto and digital asset trading space.
As a validation agent, VerifyVASP can help obtain Legal Entity Identifiers (LEIs) for its VASP clients quickly and efficiently. It can then incorporate its clients’ LEIs into its decentralised messaging service to provide the verified entity identification data needed for compliance with current and anticipated regulatory requirements, including the Financial Action Task Force’s (FATF) Travel Rule, which aims to mitigate the risks associated with the transfer of virtual assets.
“There is currently no way to determine if the same VASP is registered with multiple regulators,” says Stephan Wolf, CEO at GLEIF. “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.”
By adopting the validation agent role, VerifyVASP is expected to support the broader adoption of the LEI within the virtual asset trading market, helping to facilitate legitimate digital asset transactions from both service providers and crypto-asset issuers.
VerifyVASP CEO, Shihyun Chia, comments: “We can use LEI data to 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 FATF’s Travel Rule. The LEI helps to address this as it delivers consistent, high-quality, and globally recognised entity identification.”
The FATF Travel Rule requires VASPs to ‘obtain, hold, and submit required originator and beneficiary information associated with virtual asset transfers in order to identify and report suspicious transactions’. It aims to mitigate the risks associated with the transfer of virtual assets, especially in ownership identification, by mandating financial institutions and crypto firms involved in virtual asset transfers to acquire and exchange precise and reliable details of the originator and beneficiaries of the transaction before or during the transfer.
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