Consensys to Launch A KYC/AML Compliance System For DeFi Projects Running on Ethereum
- Ethereum-linked ConsenSys announces the launch of a compliance system that enables ETH and other ETH-based tokens to analyze crypto trades to remain KYC/AML compliant.
The cryptocurrency industry is steadily moving towards more regulation with global digital asset exchanges forced to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) compliance rules in order to operate in certain jurisdictions.
Now, ConsenSys is launching a platform that enhances KYC/AML compliance on decentralized exchanges (DEX) and decentralized finance (DeFi) platforms specifically targeting Ethereum and Ethereum based tokens.
The CodeFi Compliance will offer a management and compliance tool kit to help decentralized applications (DApps) built on blockchain to keep on the right side of the law. Codefi Compliance head of business development, Sumit Kishore said,
“We offer multiple risk management and diligence tools, but this is the launch for a core compliance offering and the focus is on KYC, which is the type of analysis most need in Ethereum native finance and commerce.”
The move by ConsenSys makes sense, as the European Union is pushing to implement the AMLD5 directives and days are counting down before crypto exchanges, wallets, and digital money transmitters set in motion FAFT’S travel rule.
ConsenSys is led by Ethereum’s co-founder, Joe Lubin, aiming to keep watch for illegal activities on these platforms to prevent a possible shutdown by the government or interference for not being compliant. According to tests carried out on the CodeFi Compliance system, over 280,000 Ethereum based tokens including ERC-20, ERC-71, ERC-179 and ERC-777 assets can run on the system at a go.
Speaking to Bloomberg Crypto, Lex Sokolin, an executive at ConsenSys in London, said,
“What we are trying to do is make activity on the decentralized financial infrastructure much safer, transparent, much easier to trace.”
The Lubin-led firm recently announced about 14% in staff reductions due to the effects of CoronaVirus but development hasn’t slowed as seen with the development of a KYC/AML compliance system.