Cryptocurrency compliance platform Shyft Network has completed a funding round with participation from Bitfury, CoinFund, BlockTower, GSR and others. The token sale netted over $6 million, according to Shyft co-founder Juan Aja Aguinaco.
Bringing the brave new world of crypto in line with the rest of the financial system, particularly regarding anti-money laundering (AML) rules, is a complex problem that Shyft is set on solving – in a decentralized fashion.
The Shyft Network, which goes live later this month, is a public blockchain based on Ethereum, which also has its version of “gas” in the form of the shyft native token, which participants must purchase to use the network.
As such, Shyft’s latest token sale is not so much an “investment” in the speculative sense, said Shyft co-founder Joseph Weinberg, but rather a sale for strategic purchasers.
“After building this thing for three years, this is the pre-launch strategic token sale,” Weinberg said in an interview. “Shyft is a utility token that’s used on the shared decentralized database in order for VASPs [virtual asset service providers] to discover each other, and to meet the costs of security and operations for the Shyft core protocol.”
June of this year will see the global AML watchdog, the Financial Action Task Force (FATF), review progress made by the crypto industry to meet obligatory data-sharing requirements accompanying transactions. The regulation is colloquially known as the “travel rule.”
“We have been working really hard to get everything out, and have been really fortunate to work with a lot of the big global exchanges,” Weinberg said, mentioning Bitfinex, Huobi and Binance. “They are saying they need to start implementing and get this moving across all of these smaller exchanges.”
Oleg Golubov, a partner at CoinFund, said Shyft’s decentralized approach to the travel rule problem was a natural fit for the crypto industry.
“Shyft’s early traction powerfully showcases the advantages of this approach for identity data management and transfer solutions,” Golubov said in a statement.
Above and beyond applying the FATF’s recommendations to digital asset firms, Shyft is also working on ways to make the growing world of decentralized finance (DeFi) a better fit for institutional players.
“The Shyft platform can bring some of the fastest-growing and creative segments of crypto to institutional audiences,” GSR Markets co-founder Cristian Gil said in a statement, adding:
“We are looking forward to providing strategic backing, and building compliant infrastructure for the DeFi ecosystem. We believe it’s likely that DeFi will need scalable KYC solutions if it is to disrupt financial services on a global scale.”