Thread by @shyftnetwork

1/ Part-5(1)

Previously we discussed how Shyft Veriscope enables VASPs (read: #crypto businesses) to share user data securely.

Today, we will talk about how and why, outside Shyft Veriscope, the approach of facilitating user data between VASPs isn’t up to mark.

2/ However, we will discuss it in two parts.

Where do we start?

Straight from the fact that the current state of Travel Rule compliance is sub-optimal at best.

Why?

❌ Wrongful interpretation of FATF recommendations

3/ This leads to:

❌ Significant data privacy & security risks
❌ Higher chance of fraud
❌ Decreased operational efficiency

Now, let’s look at the issues one-by-one! 👀

4/ For better understanding, let’s check the commonly used Travel Rule abbreviations.

💡 oVASP = Originator VASP
💡 bVASP = Beneficiary VASP
💡 PII = Personally Identifiable Information
💡 Originator = Person sending crypto 
💡 Beneficiary = Person receiving crypto

5/ Case-1: Beneficiary shares their full legal name with Originator as per the ID

There are two issues here:

❌ Originator may use the shared information & take over the beneficiary account.

❌ Originator uses the shared information to pass it on. This is called doxxing.

6/ Case-2: oVASP receives beneficiary PII (read: user data of beneficiary) from the originator.

The most glaring mistake possible here is:

❌ Wilfull omission of information 
❌ Misspelled name
❌ Misplaced first & last name

So, this is an inefficient process.

That's it for now 👋

We will continue the part-5 series later today with another case proving how the current approach to Travel Rule compliance is sub-optimal.

In the meanwhile, comment below with your questions, if any. We will answer them asap.

@threadreaderapp unroll #Veriscope #TravelRule