{"id":439882,"date":"2022-04-30T16:18:00","date_gmt":"2022-04-30T13:18:00","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/"},"modified":"2022-04-30T16:18:00","modified_gmt":"2022-04-30T13:18:00","slug":"solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/","title":{"rendered":"# Solving the \u2018Sunrise Issue\u2019 is the key to unlocking crypto mass adoption"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a276669819ac\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a276669819ac\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/#%E2%80%9D_Solving_the_%E2%80%98Sunrise_Issue_is_the_key_to_unlocking_crypto_mass_adoption_%E2%80%9C\" >&#8221; Solving the \u2018Sunrise Issue\u2019 is the key to unlocking crypto mass adoption &#8220;<\/a><ul class='ez-toc-list-level-2' ><li class='ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/#The_current_state_of_VASPs_%E2%80%94_and_the_Travel_Rule\" >The current state of VASPs \u2014 and the Travel Rule<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/#The_sunrise_is_for_everyone_right\" >The sunrise is for everyone, right?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/#Getting_real_about_regulation\" >Getting real about regulation<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/buradabiliyorum.com\/en\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/#How_to_solve_the_Sunrise_Issue\" >How to solve the Sunrise Issue<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/buradabiliyorum.com\/en\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\/#Crypto_deserves_better\" >Crypto deserves better<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Solving_the_%E2%80%98Sunrise_Issue_is_the_key_to_unlocking_crypto_mass_adoption_%E2%80%9C\"><\/span>&#8221; Solving the \u2018Sunrise Issue\u2019 is the key to unlocking crypto mass adoption &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<div class=\"post-content\" data-v-2a0745c6>We have all been there. You see something, hear something, or feel something, and want to share that feeling or observation with someone else. Do you pick up the phone? Send over a text? Record a voice note?<\/p>\n<p>Humans thrive in our shared experiences: a captivating concert, the winning goal of a sports match, waking up to watch the sunrise. There&#8217;s something fulfilling about having an experience and being able to share it with someone in real time. And due to <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/technology\/\" data-internallinksmanager029f6b8e52c=\"4\" title=\"Technology\" target=\"_blank\" rel=\"noopener\">technology<\/a>, we can do that, even if another person, call them our counterpart, is halfway across the world.<\/p>\n<p>So why wouldn&#8217;t we expect the same level of seamless communication and collaboration across an industry built around that very idea \u2014 total interconnectivity and a global reach? Crypto was built to democratize access to finance, community and technology. And yet, in the current regulatory climate, as government agencies tighten their grasp on how customers transact via the Coinbases and Binances of the world, we are experiencing growing delays amid rapidly expanding sanctions that are causing a major break into crypto&#8217;s connectivity. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-04\/52489632-7d72-4b91-96ab-cefe03f43d2e.png\"><\/figure>\n<p>As a result, crypto exchanges are experiencing a detrimental roadblock when attempting to comply (and process compliant transactions between each other) amid global regulation. What&#8217;s holding our industry back in a time when we need clear compliant solutions? Meet the Sunrise Issue.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_current_state_of_VASPs_%E2%80%94_and_the_Travel_Rule\"><\/span>The current state of VASPs \u2014 and the Travel Rule<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you have been following crypto&#8217;s regulatory landscape in the last three years, you&#8217;ve likely come across the term &#8220;VASP,&#8221; which stands for Virtual Asset Service Provider, a term born from the FATF (Financial Action Task Force). <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-04\/69d91e55-43ec-4a5a-902d-2e6af4c6a17b.png\"><\/figure>\n<p>Beyond crafting acronyms, the FATF acts as a global watchdog agency for preventing money laundering in financial transactions. The FATF is responsible for the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/trip-and-travel\/\" data-internallinksmanager029f6b8e52c=\"10\" title=\"Trip &amp; Travel\" target=\"_blank\" rel=\"noopener\">Travel<\/a> Rule, a financial regulation that requires banks, crypto exchanges and other crypto players, as of 2020, to share data on participants (customers) in financial exchanges exceeding 1,000 USD\/EUR. Some countries have even reduced the threshold to zero. What constitutes a VASP? Broadly speaking, a VASP is a cryptocurrency exchange, liquidity provider or custodian that can be centralized or decentralized.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>FATF includes DeFi in guidance for crypto service providers<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"The_sunrise_is_for_everyone_right\"><\/span>The sunrise is for everyone, right?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>So here&#8217;s the issue and why it&#8217;s so detrimental to progress. Compliance needs to be seamless and simultaneous. From a crypto compliance standpoint, let&#8217;s break down what that means, and how when a VASP posts a request for information on transacting customers to another VASP, issues can arise. VASP &#8220;A&#8221; (a crypto exchange) operates in a jurisdiction where Travel Rule compliance is required. According to the &#8220;Sunrise Issue&#8221; analogy, VASP A can see the sunrise in their location and wants the ability to talk about it (exchange customer details) with a counterpart who lives in a different place, where the sun hasn&#8217;t yet come up (VASP B). VASP &#8220;B&#8221; is located where the Travel Rule isn&#8217;t yet a regulatory obligation. VASP B is not only in a different \u201ctime zone,\u201d it has different rules altogether. How to solve the dilemma when there is one compliant and one non-compliant VASP?<\/p>\n<p>VASP A (a crypto exchange where money is being deposited or sent) sends an \u201cinformation request\u201d to VASP B. To return to the Sunrise analogy again, VASP A wants to talk to VASP B about their experience watching the sunrise. VASP A posts a request for this information from VASP B, who doesn\u2019t respond because the sun has not yet come up where they are. It could be tomorrow, it could be a year, but for now, there is a misalignment that is leading to potential non-compliance for VASP A, which will still be held accountable to its specific regulators. The Sunrise Issue strikes.<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>DeFi: Who, what and how to regulate in a borderless, code-governed world?<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Getting_real_about_regulation\"><\/span>Getting real about regulation<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Over the past few years, platforms across crypto and DeFi have been hard at work building compliant solutions to government regulations like the Travel Rule. Ideally, these solutions allow VASPs to operate with no interruption to how their customers would normally transact. <\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/s3.cointelegraph.com\/uploads\/2022-04\/4f660e41-42b3-4673-9d0c-a47b6b49b7d9.png\"><\/figure>\n<p>The truth is that regulation is no longer an &#8220;if&#8221; in crypto. It&#8217;s here \u2014 and it&#8217;s growing. And though the knee-jerk reaction among some in our industry is to villainize regulation, compliance protects customers and exchanges and is put in place to protect against malicious intent and bad actors who set the industry back in our journey towards global mass adoption. This need is real: according to TechCrunch, crypto losses have <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/techcrunch.com\/2022\/04\/04\/q1-crypto-losses-spike-695-on-year-following-massive-hacks\/\">spiked<\/a> 695% on year following massive hacks, like last month&#8217;s $625 million Axie Infinity\/Ronin Network exploit. The trick is, how do we remain compliant, protect ourselves and not give up the level of pseudo-anonymity and identity that many of us turned to crypto to experience in the first place?<\/p>\n<p><strong><em>Related: <\/em><\/strong><strong><em>The loss of privacy: Why we must fight for a decentralized future<\/em><\/strong><\/p>\n<h2><span class=\"ez-toc-section\" id=\"How_to_solve_the_Sunrise_Issue\"><\/span>How to solve the Sunrise Issue<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The answer is compliant solutions that solve the Travel Rule <em>and<\/em> the Sunrise Issue. If we are going to be a compliant industry, we must ensure that regulation is possible (and frictionless) for all involved parties. For that to be possible, VASPs must be able to process transactions \u2014 and transmit the necessary customer data \u2014 between each other, regardless of whether one VASP is Travel Rule-compliant and the other is not quite yet adhering to regulations of their jurisdiction because of staggered implementation.<\/p>\n<p>How do we get there? Solutions like Verisope, a Travel Rule solution and decentralized discovery P2P data transmission network just launched by Shyft Network permit a &#8220;historic lookback&#8221; on any crypto transaction involving a VASP broadcast. This feature allows VASPs to obtain information on any transaction regardless of when it h<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ened, even before the receiving VASP signed on with Veriscope or another Travel Rule solution. As a new VASP joins, they receive these historical data requests and can respond with the necessary information, preventing the industry roadblock (aka the Sunrise Issue) between compliant and non-compliant VASPs.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Crypto_deserves_better\"><\/span>Crypto deserves better<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If there\u2019s ever been a need to democratize access to compliance while protecting customer identity on-chain, that time is now. In late March, we woke up to the <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">news<\/a> that the European Parliament had voted on implementing new sanctions that would require KYC (know-your-customer) compliance on private, unhosted crypto wallets. Regulation will soon touch every jurisdiction across the globe and every person within each jurisdiction. If exchanges and customers want to transact (and host process transactions) legally, we will need to be able to share key information for current, past and ongoing transactions.<\/p>\n<p>Shared experiences and the ability to communicate are ultimately what make us human. If crypto is here to help improve finance and humanity, we deserve the best solutions to the most challenging problems. Let\u2019s be ready.<\/p>\n<p class=\"post-content__disclaimer\"><em>The views, thoughts and opinions expressed here are the author\u2019s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.<\/em><\/p>\n<div>\n<div style=\"background: rgb(239, 239, 239); border: 1px solid rgb(204, 204, 204); padding: 10px;\"><strong>Joseph Weinberg<\/strong> was an early investor in Bitcoin in 2010 and director at Coinsetter until its acquisition by Kraken in 2016. He knows his way around the cryptocurrency world. Currently, Weinberg is the co-founder of Shyft Network, the blockchain-based trust network that reclaims trust, credibility and identity. Passionate about advancing the mass adoption of crypto and blockchain, he also serves as an advisor to the OECD and the Financial Stability Board as well as governments and regulatory bodies globally. <\/div>\n<\/div>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template>\n<\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more News articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/solving-the-sunrise-issue-is-the-key-to-unlocking-crypto-mass-adoption\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Solving the \u2018Sunrise Issue\u2019 is the key to unlocking crypto mass adoption &#8220; We have all been there. You see something, hear something, or feel something, and want to share that feeling or observation with someone else. Do you pick up the phone? Send over a text? Record a voice note? Humans thrive in&#8230;<\/p>\n","protected":false},"author":1,"featured_media":439883,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDQvNDhkNjc3YmEtOGMxMC00ZDQ3LWI3NDEtZmJlZDIwYjU2ZjEzLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[15047,74894,74863,74868,79096,71511,55229,70934],"class_list":["post-439882","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-privacy","tag-blockchain","tag-cryptocurrencies","tag-defi","tag-fatf","tag-government","tag-law","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/439882","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=439882"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/439882\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/439883"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=439882"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=439882"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=439882"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}