Notabene’s holistic solution facilitates growing collaboration between crypto exchanges to meet global regulations, including FATF’s Travel Rule
Notabene, an end-to-end solution for crypto regulatory compliance and collaboration, announced a $10.2 million Series A funding round co-led by F-Prime Capital and Jump Capital. Peter Johnson from Jump Capital will serve on Notabene’s board of directors.
Existing customers Luno & Bitso extended a vote of confidence to Notabene by investing. Gemini Frontier Fund and the VC arm of global operator BlockFi also participated. Additional support came from Illuminate Financial, CMT Digital, Fenbushi Capital, and ComplyAdvantage’s CEO Charlie Delingpole alongside existing investors, Castle Island Ventures, Green Visor Capital and Signature Ventures.
The new injection of funding will be used for product development, meeting the demand of crypto companies applying for operating licenses, and developing crypto counterparty risk management solutions more broadly.
“We are on a mission to allow crypto native companies to comply with the travel rule today and keep their doors open,” said CEO Pelle Braendgaard. “The majority of crypto companies find themselves at a pivotal moment as regulators around the globe set forth long-awaited regulatory requirements. Conversely, the nature of permissionless blockchains makes it challenging to fulfill the technical requirements. Complying with new regulatory requirements will enable crypto companies to unlock trillions of institutional dollars, establish banking relationships, launch new products and bring trust to the industry.”
In 2019, global money-laundering watchdog the Financial Action Task Force (FATF) introduced new guidelines that treat crypto companies as regulated financial entities. Going forward, companies that custody and exchange virtual assets on behalf of customers must register with their local regulator and be licensed to operate in most jurisdictions. Additionally, crypto companies will have to comply with existing regulatory requirements similar to banks, including the “Travel Rule,”––which mandates collaboration to verify each other’s customers for transactions over a certain threshold. Regulators, including the US’s FinCEN, the UK’s Financial Conduct Authority, and Singapore’s Monetary Authority, now expect all companies providing crypto products to be fully compliant within the year. Germany’s BaFin has expected Travel Rule compliance since the beginning of October 2021.
Adding counterparty information to a blockchain transaction doesn’t just benefit exchanges and their regulators; it also allows consumers to trust to whom they are sending funds. The FTC reports that Americans lost over $80 million in cryptocurrency scams between October 2020 and April 2021.
Currently, it is impossible to transfer personally identifiable information through the blockchain and equally improbable to tell with a high level of certainty if an institution is on the other side of the transaction. Additionally, the speed with which regulations are being enforced is not on par with industry readiness.
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Notabene leverages decentralized identity protocols to create a Trust Framework that allows companies to become Travel Rule compliant today. Notabene’s offering comprises a suite of protocol-agnostic tools, software, and comprehensive data that enables crypto companies to manage counterparty risk securely and exchange customer data with any counterparty in a privacy-preserving way.
“At Jump, we believe crypto will be the defining technological innovation of our age and look to invest in companies that move the industry forward. Notabene is well-positioned to be a leader in enabling mainstream crypto adoption by ensuring regulatory compliance for crypto-native companies and financial institutions worldwide. We are proud to support Notabene and look forward to working closely with its team,” added Peter Johnson, Partner at Jump Capital.
Notabene is the first-to-market end-to-end Travel Rule compliance solution with 20+ customers on their platform, including global exchanges like Luno, Bitso, Paxful, Crypto.com. Notabene’s Travel Rule compliance solution has enabled 50+ exchanges to process Travel Rule transactions between counterparties.
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