Token and staking markets integrate with the ComPilot Crypto AML Compliance Solution widget, ensuring that market access is governed by custom compliance specifications.

Individuals and businesses interacting with tokens issued and distributed in a market must adhere to the market's compliance rules, which are enforced at the smart contract level. This means that all market participants must undergo identity verification and transaction checks as specified by the market creator's compliance rules.

This integration ensures that any investor or issuer will meet the following requirements:

Know Your Customer (KYC) / Know Your Business (KYB) checks before entering a market.
Know Your Transaction (KYT) continuously monitors transactions to ensure rules are enforced after the KYC/KYB

The rules offer a comprehensive compliance solution, adaptable from very strict private markets to more flexible public markets. This includes:

Identity verification with KYC/KYB and AML checks.
Continuous monitoring with KYT.
A unified user profile for both retail and institutional participants, enabling reusability across various providers.
Token transfer rules based on predefined criteria.
Connectors to external providers for AML and fraud analytics checks.

Steps

As a market creator:

Create a ComPilot instance.
Design your compliance rules and scenario on ComPilot (e.g., include/exclude US participants, upload proof of address).
Use Evergon to deploy your market and map it to your ComPilot instance.
Send invitations to issuers and investors to join your market.
Integrate the ComPilot into your market.
- No-Code Solution: ComPilot works out of the box.
- Evergon API or SDK: Integrate ComPilot into your application.
Issuers and investors complete their KYC/KYB processes based on the compliance rules you set.
ComPilot rechecks the eligibility of investors and issuers with every on-chain interaction.

ComPilot Widget for Participant Screening

the ComPilot Crypto AML Compliance Solution widget is integrated into the Token Market Infrastructure to perform comprehensive KYB/KYC checks. This single interface allows you to:

Onboard participants, add their information, and upload their documentation (ID, proof of address, etc.).
Check participants against sanction lists, PEP (politically exposed persons) lists, and adverse media records.
Assign a verified wallet to each participant through the KYC/KYB service.
Gate the platform, ensuring only users who have completed the verification checks can access the market.
After verification, participant activity is continuously monitored via KYT, with each transaction requiring an additional eligibility check to maintain compliance.

The widget can be integrated using a simple SDK or is available out-of-the-box with Evergon's no-code solution.

Finally, the widget aggregates multiple KYC providers, allowing you to configure a specific provider through the ComPilot dashboard.

Rules Engine

Market creators define specific criteria that customers must meet before interacting with the market. The widget adheres to rules configured on the ComPilot Rules Engine.

These rules can be updated at any time through the dashboard, allowing your compliance strategy to evolve as needed.

Market creators can define how KYC, KYB, and KYT checks are conducted through customizable scenarios. These scenarios can be sourced from predefined templates provided by ComPilot, which offer standard compliance procedures for common use cases. Alternatively, market creators can design custom scenarios tailored to their specific needs, allowing for greater flexibility and adaptability to unique regulatory environments.

Know Your Customer (KYC) and Know Your Business (KYB) - AML Checks

The KYC and KYB processes use specific criteria or checks to verify and ensure the legitimacy and security of users and businesses interacting with the Token Market Infrastructure:

Geography: Ensure users' locations comply with regulatory requirements.
Type of Documents: Require proof of address, ID, or passport for verification.
Biometric Verification: Utilize biometric data for better security and verification.
Accreditation: Verify that users meet specific accreditation standards.
Politically Exposed Person (PEP): Screen for individuals with a higher risk due to their political positions.
Adverse media: There may be risks associated with doing business with an individual or business that appears in an adverse media search.

Know Your Transaction (KYT) Checks

After KYC and KYB processes are completed, KYT takes over by monitoring the transaction activities of verified users. Continuous monitoring helps in adhering to regulatory standards.

Know Your Transaction (KYT) involves real-time monitoring and analysis of transactional activities to detect suspicious or illicit behavior, such as money laundering or terrorist financing. ComPilot uses KYT providers like Scorechain to gather and monitor transaction data that is returned via webhooks.

Travel Rules

Our ComPilot integration supports the implementation of travel rules by tracing, collecting, and verifying detailed information about the parties within a transaction.

The Travel Rule is a crucial regulatory requirement that mandates financial institutions to share specific information about the sender and receiver of transactions over a certain threshold. This rule is designed to prevent money laundering and ensure transparency in financial transactions.

Specifications at the Smart Contract Level

The solution is enforcing rules on every transaction, at the smart contract level, in order to guarantee that only compliant users can interact with the tokens throughout the lifecycle.

Each time a participant intends to interact with the market through an on-chain transaction, ComPilot is required to contribute by compiling the transaction. In order to approve the compilation of the transaction, ComPilot will do additional compliance, as the check-eligibility function is called by Evergon Market.

If the check passes, ComPilot will approve the participant to sign the transaction; otherwise, it will block the transaction in order to gate any participant that has stopped following the rules of the market.

As such, if a user initially passes the KYC but later triggers a restriction or if the market creator decides to add stricter compliance rules, ComPilot will automatically gate out the user from participating in the market.

Integrate Your KYB/KYC Provider

Evergon supports many KYB/KYC providers, ensuring easy integration and avoiding redundant compliance processes for customers. If your own provider is not on the list, Evergon can incorporate it to streamline compliance.

Reusability of Providers

Evergon ensures reusability between various KYB/KYC providers, allowing users who complete KYB/KYC on another platform with the same rules to bypass additional checks so they do not need to undergo another KYB/KYC check. This reduces friction and improves the user experience.

External Providers

ComPilot integrates more than 20 providers, including:

Scorechain for KYT screening.
IPQualityScore for fraud detection.
ComplyAdvantage for AML screening.
Sumsub for KYC data collection.