Toward a Public-Key Management Framework for Virtual Assets and Virtual Asset Service Providers

Electronic version of an article published as [The Journal of FinTech, Volume 1, Number 1, 2021, 27 pages] [https://doi.org/10.1142/S2705109920500017] © [copyright World Scientific Publishing Company]

Posted: 8 Jul 2021

See all articles by Thomas Hardjono

Thomas Hardjono

Massachusetts Institute of Technology

Alexander Lipton

Massachusetts Institute of Technology

Alex Pentland

Massachusetts Institute of Technology (MIT)

Date Written: May 6, 2020

Abstract

The recent Financial Action Task Force (FATF) Recommendations define virtual assets and virtual asset service providers (VASPs), and require under the Travel Rule that originating VASPs obtain and hold the required and accurate originator information and the required beneficiary information on virtual asset transfers. In this paper, we discuss the notion of key ownership evidence as a core part of originator and beneficiary information required by the FATF Recommendations. We discuss the approaches to securely communicate the originator and beneficiary information between VASPs, and review the existing standards for public-key certificates as applied to VASPs and virtual asset transfers. We propose the notion of a trust network of VASPs in which originator and beneficiary information, including key ownership information, can be exchanged securely off-chain while observing the individual privacy requirements.

Keywords: Virtual asset, virtual asset service provider, blockchain, public-keycerticates, key management

JEL Classification: G1,G2,O33

Suggested Citation

Hardjono, Thomas and Lipton, Alexander and Pentland, Alex, Toward a Public-Key Management Framework for Virtual Assets and Virtual Asset Service Providers (May 6, 2020). Electronic version of an article published as [The Journal of FinTech, Volume 1, Number 1, 2021, 27 pages] [https://doi.org/10.1142/S2705109920500017] © [copyright World Scientific Publishing Company], Available at SSRN: https://ssrn.com/abstract=3872163

Thomas Hardjono (Contact Author)

Massachusetts Institute of Technology ( email )

Alexander Lipton

Massachusetts Institute of Technology ( email )

Alex Pentland

Massachusetts Institute of Technology (MIT) ( email )

77 Massachusetts Avenue
50 Memorial Drive
Cambridge, MA 02139-4307
United States

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