In 2010, 10 000 Bitcoins were used to pay for two pizzas in Florida, USA.
At today's valuation of Bitcoin, those pizzas cost USD306 364 000.
Cryptocurrencies and other virtual assets have become fiat currencies managed by Virtual Asset Service Providers (VASPs), and regulating these assets is a critical necessity for governments and financial institutions worldwide.
To assist, the Financial Action Task Force (FAFT) amended its Recommendation 16: the Travel Rule.
In the Updated Guidance for A Risk-Based Approach for Virtual Assets and Virtual Asset Service Providers, FAFT requires that all VASPs have an "obligation to obtain, hold, and transmit required originator and beneficiary information, immediately and securely, when conducting VA transfers.".
Every VASP must get and share details about the sender and recipient of a virtual asset with counterpart VASPs or financial institutions before or during the transaction.
And Cowrie can assist any VASP by simplifying compliance with all applicable FAFT Recommendations.
1. Customer Due Diligence (Recommendation 10)
Cowrie users add and manage their verifiable information.
This enables VASPs to conduct due diligence at any time effortlessly. With consented access, Cowrie can identify changes in a customer's information, allowing VASPs to conduct continuous due diligence and keep their records current.
Cowrie can easily track the FATF's designated transaction value threshold of USD/EUR 1 000 and automatically initiate a customer due diligence review.
2. Information Transfer (Recommendation 16)
Using Cowrie's consent management protocols, VASPs can securely obtain and share necessary transaction data, including originator and beneficiary details.
VASPs can hold the data and quickly provide it to appropriate authorities upon request. Additionally, VASPs can use the consented access to information to monitor the availability of information and take appropriate remedial actions where necessary.
3. International Cooperation (Recommendations 37 to 40)
As it's a cloud-based web app, Cowrie can facilitate rapid and effective international cooperation. By providing a secure environment for data sharing, Cowrie eases the process of exchanging information between VASP supervisors.
4. Privacy Law Compliance and Data Security
Cowrie ensures that users fully comply with the Protection of Personal Information Act and the General Data Protection Regulation. Additionally, Cowrie uses independent multi-factor authentication and the best-in-class encryption protocols for data at rest and in motion.
5. Onboarding and Credential Verification
Cowrie offers simple and fast VASP onboarding, reducing administrative burdens.
VASPs can issue credentials, request credential verification, and automatically capture and upload data.
6. Audit and Assurance
Data stored on Cowrie is traceable and tamperproof, simplifying and speeding up any audit and assurance process.
Regulatory compliance is as simple as providing auditors access to selected content in the document vault and audit logs.
7. Single Source of Truth and Data Portability
Use Cowrie as a single source of truth for all information related to a business or individual, eliminating duplicate data entries and streamlining data capturing.
Additionally, permissioned data can be shared with any designated party, ensuring data interoperability within the financial sector.
Cowrie removes costly and time-consuming implementations and compliance burdens which may prohibit new VASPs from entering the market.
Using the platform ensures that all information is secured and that only the required information is shared, and then only with informed consent.
Cowrie enables VASPs to easily comply with FATF's recommendations while benefiting from enhanced operational efficiency and data security.
For any challenge a Virtual Asset Service Provider encounters, Cowrie provides a real RegTech solution.