Neo is one of the first entities to join the Web3 KYC Alliance, an organization of blockchain companies looking to deploy identity solutions to ensure its members comply with regulations. Neo aims to strengthen its presence in the South Korean blockchain market through the alliance, aiming for compliance with Travel Rule regulations.
The Financial Action Task Force is an international organization that develops policies to combat money laundering and other illegal 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 custody solutions) to obtain and provide personal information about the sender and a recipient when a digital asset is transferred to another VASP or financial institution.
The Web3 KYC Alliance was formed by the Bifrost Foundation, which is also charged with growing the Bifrost Network, an EVM-compatible network built to provide cross-chain capabilities for its dApps. Initially, efforts will focus on South Korea through partnerships with the Korea Information Certificate Authority for compliance issues and CODE for anti-money laundering expertise.
KICA uses public key infrastructure services to ensure cybersecurity and issues approximately 3 million certificates per year, holding 43% of the market share. CODE claims to be the only Travel Rule provider in South Korea. Cumulatively, KICA and CODE have a customer base of approximately 20 million users.
The Web3 KYC Alliance will focus its efforts on Web3 identity solutions that comply with KYC authentication with Travel Rule regulations. To do this, the Alliance will attempt to build a decentralized identity verification system that issues a soul-bound token to the identified user. An SBT is a type of token that can only be owned and transferred to one address. The blockchain-backed system allows users to verify that their wallet has the correct KYC status for services that require such information.
Ultimately, the Alliance aims to reduce the exposure of personal information and provide a smooth transition for traditional Web2 companies into the blockchain space.
The announcement can be found via the link below:
https://neo-blockchain.medium.com/neo-joins-the-web3-kyc-alliance-as-a-bold-move-toward-innovation-and-regulatory-compliance-d4454b26d066
