Proposal for Customer Identification Service Model Based on Distributed Ledger Technology to Transfer Virtual Assets

Abstract

Recently, cross-border transfers using blockchain-based virtual assets (cryptocurrency) have been increasing. However, due to the anonymity of blockchain, there is a problem related to money laundering because the virtual asset service providers cannot identify the originators and the beneficiaries. In addition, the international anti-money-laundering organization (the Financial Action Task Force, FATF) has placed anti-money-laundering obligations on virtual asset service providers through anti-money-laundering guidance for virtual assets issued in June 2019. This paper proposes a customer identification service model based on distributed ledger technology (DLT) that enables virtual asset service providers to verify the identity of the originators and beneficiaries.

Keywords

• blockchain
• distributed ledger technology
• cryptocurrency
• virtual asset
• customer identification
• customer due diligence