By integrating Notabene’s compliance platform, Cake DeFi will become fully compliant with the Travel Rule starting in Singapore. The Travel Rule states that crypto exchanges, digital wallet providers, and financial institutions that work with virtual assets should disclose, collect, screen, and transmit customer data beyond a certain threshold.
The Travel Rule poses some challenges for large companies in the crypto space such as Cake DeFi, which is why the fintech decided to work with Notabene in order to leverage a solution that can handle the varying jurisdictional implementations of the Travel Rule and connect to Virtual Assets Service Providers (VASPs) around the world.
All holders of a payment service license under the Payment Services Act 2019 are affected by the Travel Rule in Singapore. This means that originator VASPs need to transmit value originator and beneficiary customer information to the Beneficiary VASP regardless of the value transfer amount. Moreover, if the SGD 1,500 threshold is exceeded, more information is required.
Notabene’s platform supports customers as they navigate the complexities of transacting across different borders, as counterparties need to comply with different travel rule obligations, both in terms of thresholds and the scope of the required information.
The platform is able to provide the necessary support by embedding jurisdictional rules. With Notabene, Cake DeFi will be able to keep a close eye on all transactions in one dashboard with a unified set of rules that automate decision-making. The Notabene platform also offers multi-entity support, which means that Cake DeFi can manage transaction flows to the correct entity based on the appropriate jurisdictional requirements.
In September 2022, The Paypers interviewed Catarina Veloso, Legal Engineer at Notabene, who shared some advice on how to best reflect on travel rule requirements of different jurisdictions and how these can affect one's business.
When it comes to the specific challenges related to travel rule standardisation, it’s worth noting that Travel Rule requirements vary substantially across jurisdictions, especially in terms of applicable de minimis thresholds and the scope of originator and beneficiary information that needs to be transmitted.
Even though Travel Rule requirements are still not uniformly mandated across jurisdictions, the industry is making good progress toward compliance. Catarina noted that VASPs need to be ready to start engaging in Travel Rule flows, and in order to target this specific issue, Notabene has launched its Sunrise Plan that allows entities to monitor which of their counterparties comply with the Travel Rule while offering solutions to signal their own compliance readiness to regulators and transaction counterparties.
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