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Solving compliance for crypto businesses using Decentralized Identity – Pelle Braendgaard

  1. Using Decentralized Identity to solve compliance for crypto businesses Pelle Braendgaard CEO @PelleB SSIMeetup.org
  2. 1. Empower global SSI communities 2. Open to everyone interested in SSI 3. All content is shared with CC BY SA Alex Preukschat @SSIMeetup @AlexPreukschat Coordinating Node SSIMeetup objectives
  3. Agenda ● Travel Rule & its impact ● OpenVASP ○ VASP Code and VAAN ● InterVASP IVMS-101 ○ Messaging standard for Travel Rule PII ● The Notabene solution ● Non-custodial wallets and SSI ● Questions
  4. About Notabene? SSIMeetup.org
  5. Regulatory Compliance tools for Blockchain Companies Notabene helps financial companies be compliant with new, global anti-money laundering regulations for crypto transactions coming into effect right now. ● Entire founding team previously at uPort ● Believe strongly in SSI ● Entire architecture is based on SSI DIDs/VCs ● Blockchain and DID method agnostic SSIMeetup.org
  6. The Travel Rule SSIMeetup.org
  7. FATF Recommendation 16 SSIMeetup.org
  8. Who is the FATF? SSIMeetup.org
  9. ● Introduces global framework ● Applies the Travel Rule to Crypto ● New definition of VASP (Virtual Asset Service Providers) ○ Crypto/Crypto Exchanges ○ Crypto/Fiat exchanges ○ Any custodial key management service ○ Token Issuance platforms 2019 Guidance for Virtual Assets SSIMeetup.org
  10. Direct Bitcoin Transaction SSIMeetup.org
  11. Custodial Bitcoin Transaction today SSIMeetup.org
  12. Travel Rule Bitcoin Transaction SSIMeetup.org
  13. Travel Rule has several Identity Related challenges SSIMeetup.org
  14. Sharing customer’s Personal Identifying Information (PII) with beneficiary institution SSIMeetup.org
  15. Originating VASP ● Is my counterparty regulated? ● Do they have proper AML/KYC policies ● Who are they? ● Can I trust them with my customer’s PII? Know Your VASP Beneficiary VASP ● Is my counterparty regulated? ● Do they have proper AML/KYC policies ● Who are they? ● Did they properly KYC the Originating Customer? SSIMeetup.org
  16. OpenVASP SSIMeetup.org
  17. Open protocol to implement FATF’s travel rule for virtual assets ● Functionally similar to SWIFT ● Strong decentralized design ● Blockchain agnostic ● Based on Decentralized Identity ● OVIPS (OpenVASP Improvement Proposals) ○ SSIMeetup.org
  18. Identifying a VASP using a VASP Code ● Similar to SWIFT Code ● Decentralized Issuance through smart contract on Ethereum Mainnet ● Will become a DID method ● On-chain Credential Registry ● VASP Verifiable Credential SSIMeetup.org
  19. Identifying a customer using a VAAN ● Similar to IBAN Code ● Used instead of Blockchain Address ● Issued by VASP and tied to a VASP ● Not really SSI as issued by VASP ● Better Privacy than Blockchain Address ● Maybe VAAN DID method? t = VASP Code Type r = Reserved bits v = VASP Code c = Internal Identifier x = Check Digits tt | rr | vvvvvvvv | cccccccccc | xx 10 | 00 | bb528777 | e33b078520 | 9e SSIMeetup.org
  20. IVMS-101 SSIMeetup.org
  21. InterVASP IVMS-101 Universal common language for communication of required originator and beneficiary information between virtual asset service providers ● Originating customers PII ● Just data model ● Could be wrapped in VCs SSIMeetup.org
  22. Notabene Travel Rule Solution SSIMeetup.org
  23. Travel Rule Dashboard ● Send Travel Rule Transactions ● Handle incoming transactions ● Travel Rule protocol agnostic ○ Support OpenVASP now ● Blockchain agnostic SSIMeetup.org
  24. Know Your VASP Trust Framework ● Built on SSI ● DID’s for VASPs ● Issue VC’s ● Public VCs ○ ○ OpenVASP Registry ● Selective Disclosure ○ Request and exchange private VCs ● Integrated into Travel Rule workflow SSIMeetup.org
  25. ● Free public directory of VASPs ● Initially based on web DIDs and Verifiable Credentials ● Adding support for new OpenVASP directory SSIMeetup.org
  26. The Travel Rule and Non-Custodial Wallets SSIMeetup.org
  27. Non-Custodial Wallets do not need to implement travel rule ● VASPs will be required to prove ownership of addresses to support Non-Custodial Wallets ● Ideally SSI functionality can be built in ● Notabene allows VC like Ownership Proofs to be issued by the majority of wallets SSIMeetup.org
  28. Concordium - Identity Verified blockchain SSIMeetup.org
  29. Please reach out Pelle Braendgaard CEO @PelleB Future work in SSI ● Would like to support all SSI wallets ● Consume credentials from 3rd party credential issuers ● Help Blockchain wallets to add basic SSI functionality