Updated: Aug 26, 2022
(First posted on https://www.idaxa.org)
The Virtual Asset Service Providers Summit (V20 Osaka) held in May last year was a very successful summit for a number of reasons. The meeting brought together the world's most influential Virtual Asset Service Providers (“VASPs”) to discuss the most critical issues. The most important issue facing the Industry in 2019 was the so-called “Travel Rule,” which is Recommendation 16 in the Virtual Asset Guidelines written by the Financial Action Task Force (FATF).
To put in more context, the Travel Rule is essentially the sharing of client information between the sender intermediary and the recipient intermediary to prevent Money Laundering and Terrorist Financing. This has been the norm for financial institutions and has been enhanced since the terrorist attacks of 9/11.
However, the concern for Industry was this Recommendation was made without any consultation with Industry. Any consultation would have shown the Travel Rule is not an easy fix for the Virtual Asset space. When someone sends bitcoin to another person, there is no way to find out who the stakeholders are in the transaction just by looking at the bitcoin addresses. At that time, there was more worry in the Industry than there was hope.
Concluding the FATF Private Sector Consultative Forum in Vienna, where the main discussions were based around Recommendation 16, Virtual Asset Trade Associations which were present saw the need to come together to speak to the Regulators. The biggest problem the Industry faced was the Associations alone were jurisdictional based such as the Association of Cryptocurrency Enterprises and Startups, Singapore (ACCESS) based in Singapore and the Crypto Valley Association (CVA) based in Switzerland. They presented the issues with no platform to give a united view.
This was the core impetus for the creation of the V20. The inaugural V20 Summit was held on the margins of the G20 Summit in Osaka in 2019, which brought together the most influential VASPs around the world, presenting the opportunity to interface with the FATF as well as Regulators and Government Officials from various countries. The V20 was not just another conference.
The first session of the Summit focused on having Regulators lay out the issues with regards to regulation, while simultaneously allowing the Industry to voice their views and concerns.
The second session which followed had the Industry come together to begin solving problems. During V20 Osaka, we had whiteboarding sessions and broke off into different groups to discuss how to solve the Travel Rule issue.
The third session had the Industry come back to give a consensus view of the issues to the Regulators. This was, and remains very important as it helps set expectations of what the Industry can (or can’t) do.
Finally, the Summit ended with closing thoughts by the Regulators.
One of the main views which came out from the Summit was to have an entity that can represent the views of the VASPs. From this, the International Digital Asset Exchange Association (IDAXA) was created. A report of the Summit was also written for the Industry at the conclusion of V20 Osaka.
V20 Osaka was initially an experiment to see the response and feedback from both the Industry and the Regulators. With an overwhelmingly positive response from those participants, we are pleased to present to you 2020’s Virtual V20, organized by IDAXA, in partnership with Global Digital Finance (GDF) and supported by the Chamber of Digital Commerce (CDC).
This year, in the midst of a global pandemic, there are new issues facing the Industry as well as the Regulators for that matter.
Since V20 Osaka last year, other issues have emerged. The FATF Private Sector Consultative Forum (PSCF), held on October 28, 2020, saw a variety of topics discussed and a number of concerns raised, e.g. the scope and definition of stablecoins, decentralized finance (DeFi) and so on. We will bring these issues into discussion at the Virtual V20. Just like V20 Osaka, we are continuing with the same format for its participants.
This year, its focus will cover three main topics. First, we will aggregate feedback from the Industry for the FATF with regards to their progress and challenges to-date. Second, we are inviting DeFi practitioners to join on Day 2 of the Summit to come together to form a consensus view on where the Industry is heading. Last but not least, we will do a deep dive into the issues and concerns with Stablecoins.
We have a long list of representatives from exceptional and prominent entities and organizations lined up for this year's V20. These include (not in any particular order) Coinbase, Ledger, Hogan Lovells, DLA Piper, Circle and many more. Nonprofits and their members, such as Singapore Cryptocurrency and Blockchain Industry Association, Crypto Valley Association (Switzerland), Blockchain Australia, Korea Blockchain Association, OpenVasp, Sygna, TRISA and more, will also be present. Regulators, such as representatives from the Financial Action Task Force, US Department of Treasury, Monetary Authority of Singapore, Financial Services Agency Japan, Securities and Futures Commission of Hong Kong and more, will be present as well.
At V20 Osaka, we took charge of our destiny by coming together. Our goal for the Virtual V20 this year is for Industry to continue to build upon the same, and we hope you can join us on this important journey.
Join the conversation to have your voice heard.
Anson Zeall Chair International Digital Asset Exchange Association