I’d like to bring the infamous ‘unhosted wallet’ regulation made by EU under the attention. I won’t comment on whether this is the right thing for EU to do, it’s not what I’d like to discuss. Somehow I expected this to happen, the banking has similar heavy regulation to avoid money laundering, funding of terrorist activities and blacklisted countries. Moreover, I’ve understood that also other countries, like US, are reflecting on similar measures. Not too happy with the fact that there is a big brother watching over our shoulder, on the other hand I understand that for crypto being accepted in society, same set of rules should be respected as with a more centralized money system (banks are subject to huge fines if they don’t respect the AML regulation).
What I’d like to bring forward is that the ThreeFold technology has about 80% of the tooling to bring a decentralized answer to this regulation.
To be compliant, you need a proof of KYC that can be linked to every transaction. This proof contains a lot of personal information, which is something that you can’t put publicly in a blockchain transaction.
However, a decentralized solution can be found through a combination of the following elements:
- a location to store publicly a certified claim (in this case, the claim that I am who I claim I aim, certified by a KYC provider). TFChain (as any other blockchain) can be used for that
- a link to a personalized private data vault, available 24/7. And fully secure. For this we have storage on the TFGrid, secured by Quantum-Safe Storage. And embedded in Digital Twin data vault.
- a way to interconnect the public part and the private part : for this we can use the Planetary network over an IPv6 address. Already implemented, see the snapshot of the Digital Twin:
- a method to have the information certified. This is a part that is still under construction but self-sovereign identity is a way to get there. There is a start of a description to make that happen (but shouldn’t be too complicated): see here.
The result is:
- respecting privacy
- solving the issues raised by the regulation, currently criticised heavily by the whole cryptospace
- a legal solution (SSI is compliant to Europe’s eIDAS regulation)
As I haven’t seen any other decentralised solution to make this happen, I believe the above will be very well received by both CEX, DEX and many crypto projects that have a customer base in Europe (and I honestly think it will also be applied soon elsewhere in the world). Does this logic make sense ?