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Neo joins Web3 KYC Alliance, aims to leverage blockchain to ensure KYC compliance

source-logo  neonewstoday.com 23 January 2024 22:48, UTC

Neo is among the first entities to join the Web3 KYC Alliance, an organization of blockchain companies seeking to leverage identity solutions to ensure its members are regulatory compliant. Neo aims to strengthen its presence in South Korea’s blockchain market through the alliance, seeking to establish compliance with Travel Rule regulations.

The Financial Action Task Force is an international organization that develops policies to combat money laundering and other illicit activities. The FATF’s Travel Rule is a set of guidelines designed to prevent money laundering and terrorist financing. It requires virtual asset service providers (i.e., centralized exchanges, wallet services, cryptocurrency custodial solutions) to obtain and provide personal information about the sender and a recipient when a digital asset transfers to another VASP or financial institution.

The Web3 KYC Alliance has been formed by the Bifrost Foundation, which is also tasked with growing the Bifrost Network, an EVM-compatible network built to provide cross-chain capabilities for its dApps. Initially, efforts will be focused on South Korea through partnerships with the Korea Information Certificate Authority for compliance matters and CODE for anti-money laundering expertise.

KICA leverages public key infrastructure services to ensure cybersecurity and issues approximately 3 million certificates per year, commanding 43% of the market share. CODE claims to be the only Travel Rule provider in South Korea. Cumulatively, KICA and CODE have a clientele of around 20 million users.

The Web3 KYC Alliance will focus its efforts on Web3 identity solutions that adhere to KYC authentication with Travel Rule regulations. To do so, the Alliance will seek to build a decentralized identity verification system that issues a soul-bound token to the user who has been identified. A SBT is a type of token that can only be owned by and transferred to one address. The blockchain-leveraged system will allow users to verify their wallets have appropriate KYC status for services that require such information.

Ultimately, the Alliance aims to reduce the exposure of personal information, and offer a smooth transition for traditional Web2 companies into the blockchain space.

The announcement can be found at the link below: