Crypto

Second KYC Provider Proposal Received By Aave’s Push for Institutional DeFi

Second KYC Provider Proposal Received By Aave's Push for Institutional DeFi

Securitize, a security token platform is looking to join Fireblocks in supplying Aave Arc ID capabilities.

As the world of “degens” gets closer to Wall Street, Securitize, a technology supplier for producing tokenized securities, is longing its system of identity verification to DeFi.

On Friday, the firm submitted its know-your-customer (KYC) solution to DeFi lending platform Aave, which is regulated by the SEC, Securities and Exchange Commission and holds US broker-deal and alternative trading systems (ATS) licenses.

Over the weekend, Aave Arc, a KYC-compliant and institutional-grade version of the DeFi lending platform, will host a community vote among stakeholders (a similar process to when Fireblocks sought to become a whitelisted custodian). The final submission of the so-called “Securitize iD” tool is scheduled for mid-January after preliminary voting and feedback.

The Financial Action Task Force (FATF), a global anti-money laundering watchdog, has stated that DeFi participants will be held to the same criteria as other “virtual asset service providers” such as exchanges and over-the-counter trading desks.

The difficulty is determining who interacts with lending and borrowing platforms, as well as liquidity pools. The built-in pseudonymity of crypto precludes institutions from copying it; the holy grail is maintaining privacy while permitting real-life authentication of who you are.

Related:  Susan G. Komen Foundation Now Accepts Donations in Cryptocurrencies

iD metrics should be secured.

Securitization has been providing KYC when investors buy or trade tokenized assets by regulators since 2017, according to Carlos Domingo, the firm’s CEO.

In an interview, Domingo remarked, “We’ve always made sure wallets that connect with our protocol for securities are KYC’d.” “At the end of 2019, we published Securitize iD for investors, where we, as a regulated business, provide KYC services and customers may link wallets to it across several blockchains.”

Securitize iD, according to Domingo, has been a runaway success, with over 400,000 users to date. He also stated that Securitize’s efforts to make DeFi acceptable to institutions will be open-source and aimed at interoperability with other platforms and blockchains.

“We can provide a completely anonymous attestation on the blockchain indicating this wallet is OK for your protocol, according to the protocol requirements,” Domingo explained. “It’s a decentralized approach of sharing identifying information while maintaining privacy.”

The Author

Samuel Adeshina

Samuel is a financial reporter whose interests include blockchain, market, business, insurance, and Crypto to provide relevant information to all interested.