Blockchain security firm CoolBitX has unveiled Sygna Hub, the latest AML/CTF-focused product to help virtual asset service providers (VASPs) meet evolving crypto regulations.
The comprehensive new API-based solution provides an easy-to-use platform boasting a modular integration of optional AML services from industry leaders such as Chainalysis and Elliptic, including advanced blockchain analytics and sanction screening, as well as Sygna Bridge, the Travel Rule protocol that is made to be interoperable with other protocols, like TRISA, through the Hub solution.
Changing regulatory landscape for VASPs
Sygna was launched in 2019 in response to the Financial Action Task Force’s Recommendation 16 update that mandates Travel Rule compliance for VASPs. Since then it has built out a Sygna Alliance network of VASPs and collaborated with the world’s biggest AML firms, including Chainalysis, Elliptic, CipherTrace, Merkle Science and ComplyAdvantage.
“In the path toward mass institutional adoption of crypto, integration still remains a major challenge for the industry,” said Mriganka Pattnaik, Co-founder & CEO of Merkle Science. “Travel Rule, sanctions screening, and blockchain analytics all play key roles in the fight against illicit activity in crypto. The Sygna Hub platform allows for integration and communication between previously siloed parts of this objective and Merkle Science is glad to be an active member of this initiative.”
With FATF’s latest reviews and updates to its Risk-Based Approach to Virtual Assets and VASPs adding new complexity to the regulatory landscape for cryptocurrencies, Sygna has been broadening the scope of its service offering to better meet the needs of crypto companies.
Michael Ou, Founder/CEO of CoolBitX said: ” The Sygna team has again demonstrated that they fully understand VASPs’ compliance pain points and how to alleviate them through intelligent product design. Sygna Hub represents our most ambitious AML endeavour as of yet. It has required many months of hard work, where we had to not only leverage our existing proprietary travel rule protocol Sygna Bridge, but also combine forces with industry leaders to create something unique for the greater good of the crypto industry as it faces evolving regulatory requirements.”
Sygna Hub and Sygna Gate, its simplified browser-based version, constitute the end result of these efforts, providing VASPs with the tools to build a robust compliance system to fulfill their regulatory duties.
Juntao Zhu, CEO/Co-Founder of Hodlnaut, a Sygna Hub client, said: “Hodlnaut is elated to be partnering with Sygna to comply with the regulatory changes in Singapore. We are tirelessly working towards providing a great user experience and collaborating with Sygna will help us achieve the same.”
Key features of Sygna Hub
Sygna Hub aims to solve the following current pain points in crypto compliance:
- Integrated and Enhanced Risk Screening
Hub’s integrated third-party blockchain analytics and sanction screening services makes it an excellent fit for VASPs operating in countries like Singapore and Japan with mature and sophisticated existing regulatory frameworks. Both Sygna Hub and Gate offer the latest integrated AML blockchain analytics services from Elliptic, Chainalysis (KYT V1 and V2) and Merkle Science.
Sygna Bridge, the standalone VASP-focused Travel Rule protocol, is also built into Sygna platforms at a software level. Sygna achieved live interoperability, offered through Gate and Hub solutions, with CipherTrace’s TRISA in February 2022, and with a similar cooperation with Shyft Network’s Veriscope targeted for Q2. Other leading Travel Rule solution providers are in the works to follow later this year.
- Sunrise issue
Sygna previously adopted IVMS101, the industry messaging protocol and has been working diligently to address the onerous so-called “sunrise issue”, which refers to an uneven roll-out of FATF-required Travel Rule regulation across member countries. As a result, Sygna clients and VASP counterparties that are using different or no Travel Rule protocol will still be able exchange the necessary data as various features of Hub are released.
- “Satoshi Test” for private information identification
An increasing number of jurisdictions such as Singapore, Switzerland, Germany and Liechtenstein are starting to require further due diligence on the VASP side, which has led to increasing demand on establishing proof of ownership of non-custodial wallet addresses.
To facilitate this identification, Sygna Hub’s new Sygna Private Wallet Ownership Tool (SPOT) leverages a “Satoshi Test” by requesting the unhosted wallet address owner conduct an on-chain-transaction to establish proof-of-wallet ownership.
- ISO 27001-certified data privacy & information security
Authorities globally are cracking down on companies misappropriating the data of their customers. As an on-premises-only product, the Sygna Hub portal allows clients to manage all of their customers’ information without the risk of exposure on external servers. All Sygna products are officially ISO 27001 certified and strictly follow ISMS standards, which can now also be adopted with ease by Sygna VASPs.
CoolBitX CEO Michael Ou is available for media interviews.
