Manual Signing Method Explained

Manual signing is a solution that allows wallet owners to prove self-hosted wallet ownership through digital signatures to a VASP where they are clients. This method relies on the basic technical capabilities of any wallet. Not only is it one of the less time-consuming wallet verification methods, but it is also incredibly secure compared to other methods, like visual proofs.

Why Would a VASP Request Verification of a Self-hosted Wallet?

For compliance purposes, VASPs must adhere to country-specific rules when transacting with self-hosted wallets as part of their AML efforts.

The Travel Rule stipulates that VASPs must identify the owner of the self-hosted wallet if at least one obliged entity is involved in the transaction. Depending on local regulations, collecting this information may be sufficient, while in other cases like Switzerland and Singapore, VASPs must verify the ownership of the self-hosted wallet.

21 Travel Rule & Manual Signing:
How It Works

From a VASP’s Perspective 

This process can be 100% automated for the VASP. The prompts below are if the process were to be done manually.

1. In the 21 Travel Rule software, the AOPP Portal Link is to be selected. 

   A pop-up will open requesting the following information:

   • the Customer ID,
   • the digital asset type.

   This information is to be completed; thereafter, Get AOPP Portal Link is to be selected.

2. Next, a pop-up will appear containing a URL to be shared with the customer to complete the ownership proof.

3. The URL will be shared with the customer via their preselected communication channel (email, iframe etc.).

   The customer will open the link, select Other Wallets, paste in their wallet address and signature, and click Add Proof. The proof will then automatically appear in the Compliance Dashboard. 

From a VASP Customer’s Perspective 

1. The customer (wallet owner) initiates a transaction with their VASP.

2. The customer will open the received AOPP Portal Link and select Other Wallets in the AOPP Portal.

3. Here, they will paste in the wallet address they wish to verify and signature then click Add Proof.

What Are the Pros?

• It is a cryptographically secure proof of ownership,
• It can be automated for the VASP.

What Are the Cons?

• Not all wallets support message signing for the end user yet,
• It may require additional software setup for the wallet user,
• Only advanced wallet users know how to execute this method, which isn’t ideal for novice crypto wallet users.
• Not all wallet verification software supports every wallet,
  For example, Electrum wallet software cannot verify signatures from Trezor and will receive an error message. Unless the VASP asks the wallet owner which wallet they use and uses the same software, this error will repeat, resulting in a bad UX for the VASP customer.