BitGo has joined the pack of solution providers attempting to bring crypto in line with global anti-money laundering (AML) standards.

Announced Tuesday, the multi-tentacled crypto firm is offering API support for the latest guidelines from the Financial Action Task Force (FATF). The watchdog’s so-called “Travel Rule” stipulates the originators and beneficiaries of financial transactions over $1,000 be identified, and that their personal data must “travel” with those transactions.

BitGo’s offering seeks to remove the headache of identifying wallets and transferring personally identifiable information between clients that use the San Francisco-based firm’s technology or custodial services.

Back in 2018, FATF said virtual asset service providers (VASPs) would be brought within its ambit, which means creating something akin to the SWIFT interbank network but for pseudonymous cryptocurrency transactions.

Read more: Crypto ‘Gray’ Markets Could Be Unintended Consequence of FATF Travel Rule

BitGo is in a unique situation, said Chris Metcalfe, the wallet platform’s senior product manager, because it is both a VASP and provider of technology to numerous other VASPs. Being a regulated custodian, in the form of BitGo Trust, helped spark the API solution, he said.

“We had to have a Travel Rule solution for our own trust clients because we are a regulated U.S. entity that is a VASP,” said Metcalfe. “So we had to build this tech or figure out how to source it, and since we are a tech provider we built it ourselves and can now offer Travel-Rule-as-a-service to our exchange clients.”

‘Source of gravity’

The FATF’s recent plenary was thought by many to signal a one-year progress review and the crypto industry has responded with a growing array of technical solutions, to the extent that some commentators have warned this is creating its own interoperability issue.

Read more: FATF Meets Wednesday to Discuss ‘Travel Rule’ for Digital Assets

In Metcalfe’s opinion, large players in the space will exert a gravitational pull on smaller VASPs, thus gradually creating a network effect. 

“Folks who have some of the largest exchanges in their network, using their solution will create the gravity that pulls the smaller players towards those networks,” he said. “So, BitGo, being the wallet platform to many of these large exchanges, has a good reason to believe we are going to be a source of gravity.”

BitGo was unable to say which large exchanges might be adopting its API Travel Rule solution, but the company’s website lists big names including BitStamp, CME and Genesis Trading (like CoinDesk, owned by Digital Currency Group) among its 40-plus trading clients. BitGo’s multi-signature wallet tech handles some 20% of all bitcoin transactions.

FATF fam

BitGo is also involved in the bank-backed Travel Rule Protocol (TRP) group alongside the likes of ING Bank, Standard Chartered and Fidelity, as well as a U.S. Travel Rule working group that also includes Coinbase.

“We are working towards an MVP (minimum viable product) with the TRP, as well as the U.S. Travel Rule working group, so we kind of have our toes in two ponds, and intend to play in both of those networks,” Metcalfe said.

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

A spectrum of Travel Rule solutions has emerged with decentralized blockchain-based solutions at one end and slightly more centralized approaches at the other. Metcalfe believes a decentralized blockchain-based network is “a great destination to arrive at,” but said it could be a heavy lift getting there quickly.

“For the groups we are talking to, getting to an MVP is very important,” Metcalfe said. “That’s not to say we are anti-decentralization. But some of the more centralized solutions allow you to get to MVP much faster; we don’t think decentralization is the first step.”

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