Today, SSL is used for transmitting sensitive information over the Internet, and it has long been a significant driver of e-commerce. Involved in this process are protocols including the Secure Sockets Layer (SSL) and Transport Layer Security (TLS), as well as certificate authorities (CAs), entities that issue digital certificates to organizations or individuals.
Now, digital identity startup Netki has announced that it is releasing what it considers to be the first digital identity certificate akin to the SSL for the blockchain in a bid to replicate both this technology and its top-lever services on the blockchain.
In interview, CEO and co-founder Justin Newton expanded on the vision for the product, which follows a wallet naming service it introduced last year. Newton pointed to the regulatory reasons why such a functionality could prove useful for those executing blockchain-based transactions. FinCEN’s travel rule was cited in particular, which “requires all financial institutions to pass on certain information to the next financial institution, in certain funds transmittals involving more than one financial institution”.
Under the travel rule, the identities of all participants involved in digital currency transfers greater than $3,000, including the money service businesses (MSBs) such as wallet providers and exchanges and the actual sender and receiver of the funds, must be known.
Newton cautioned that many companies in the digital currency industry are potentially at risk of violating OFAC rules, which harms the ecosystem in two ways. The first is that current companies could deal with significant regulatory risk. “It’s also preventing traditional financial institutions from being able to connect or interact with the open blockchain,” he argued.