Wallet Attestations for Virtual Asset Service Providers and Crypto-Assets Insurance
This addresses compliance and security problems for VASPs and crypto-asset insurers, but it is incremental as it applies existing attestation technologies to a new domain.
The paper tackles challenges in the virtual asset service provider (VASP) industry related to the Travel Rule and key management by proposing the use of wallet attestations to provide evidence for compliance and insurance risk assessment, resulting in measurable assurance levels for insurers.
The emerging virtual asset service providers (VASP) industry currently faces a number of challenges related to the Travel Rule, notably pertaining to customer personal information, account number and cryptographic key information. VASPs will be handling virtual assets of different forms, where each may be bound to different private-public key pairs on the blockchain. As such, VASPs also face the additional problem of the management of its own keys and the management of customer keys that may reside in a customer wallet. The use of attestation technologies as applied to wallet systems may provide VASPs with suitable evidence relevant to the Travel Rule regarding cryptographic key information and their operational state. Additionally, wallet attestations may provide crypto-asset insurers with strong evidence regarding the key management aspects of a wallet device, thereby providing the insurance industry with measurable levels of assurance that can become the basis for insurers to perform risk assessment on crypto-assets bound to keys in wallets, both enterprise-grade wallets and consumer-grade wallets.