How IVMS 101 Enables the FATF Travel Rule
If you have been trying to understand the Financial Action Task Force (FATF) Travel Rule for virtual assets (we recommend our article on the basics of the Travel Rule), you’ve noticed that its main purpose is the exchange of information between virtual asset service providers (VASPs). VASPs have to send similar data with each transaction, and if there was no naming convention, how would a VASP know which information refers to which required piece of data?
Let’s look at an example on the data of the originator person:
If the exchange of information was rarely performed, manual work would do the job, and the compliance officer responsible could probably infer the meaning of each data point. However, automating processes to reduce errors is a key factor in modern compliance. This is even more critical when exchanging Travel Rule information since, according to the FATF, it should be a frequent activity performed by the VASP's compliance team. Therefore, players of the cryptocurrency ecosystem have come together to build the InterVASP Messaging Standard (IVMS), allowing data exchange in a standardised way, increasing interoperability. Established by the Chamber of Digital Commerce, Global Digital Finance (GDF), and the International Digital Asset Exchange Association (IDAXA), the Joint Working Group on InterVASP Messaging Standards (JWG) holds weekly calls, led by Siân Jones and Neil Samtani from XReg Consulting.
The IVMS is a universal common language for communication of required originator and beneficiary information between virtual asset service providers, or in short, the Travel Rule.
This technical document explains the standard in detail, addressing different notations, conventions, data types, and their structures. With relevant reach within VASPs and Travel Rule solution providers, the IVMS is a great achievement to help faster and easier adoption of the FATF Recommendation, as the majority of protocols and solutions available are aligned with it, enabling communication between parties.
By supporting TRP, 21 Analytics promotes the use of IVMS through its Travel Rule solution, one of the main building blocks of our efforts to provide interoperability to all VASPs working with us.
Zooming in 21 Travel Rule: The IVMS data is on the right side of the transaction details
Reach out to learn more about IVMS. We are happy to support you with the technical integration of IVMS in your system.