Privacy-Preserving Claims Exchange Networks for Virtual Asset Service Providers

Abstract

In order for VASPs to fulfill the regulatory requirements from the FATF and the Travel Rule, VASPs need truthful information regarding subjects, such as originators, beneficiaries and other VASPs involved in a virtual asset transfer. However, given that data about subjects are siloed in various organizations and institutions, there needs to be a practical way for VASPs to obtain information from these entities without direct access to the siloed data. In this paper we describe the Open Algorithms approach as a means for data holders to make insights about subjects available to Claims Providers based on vetted algorithms. A Claims Provider delivers signed claims to VASPs regarding the relevant subject, thereby relieving the VASP from having to deal with data, algorithms and analytics. We also propose a consortium arrangement for VASPs to establish a Claims Exchange Network, in which VASPs can deliver signed claims (obtained from their Claims Providers) and public-key information or certificates to other VASPs in a secure and confidential manner.