Can KYC Be Baked Into Security Tokens on Ethereum?
We’re asked this all the time by our potential issuers: “How can KYC (Know Your Customer) and AML (Anti-Money Laundering) be baked into tokens?”
The answer is simple.
In the future, token holders replace shareholders in the global economy. That’s because Polymath is ushering in a new era: The era of “Security Token Offerings” or “STOs”.
The Polymath protocol verifies cryptocurrency addresses and links them to an individual’s identity. Issuers can rest assured knowing that only authorized investors, who meet the criteria for their particular security offering, can transact with that token.
Polymath-powered security tokens feature an up-to-date list of authorized investors inside the token’s smart contract.
The tokens are therefore able to “know” who is allowed to hold them, because you must pass verification requirements to hold Polymath-powered securities tokens. We call this list of authorized people the “whitelist”. Yep — this means everyone is blacklisted by default and unable to hold tokens until verified and added to the whitelist.
It’s like a club. If you’re in the club, you’ve been verified to participate in club activities. If you’re in the Polymath club, you’ve been verified to participate in specific token sales. Conversely, when you have a brokerage account, the world knows you have been vetted by the broker. Regulators can go to this broker dealer for information about your account.
Polymath is based upon the same concept, except everything is handled by decentralized and known participants, thus lowering the upfront costs.
It’s all laid out in the Polymath whitepaper.
As we say, “By powering the next generation of securities tokens, Polymath aims to be the catalyst that will launch the securities token revolution.”
Thanks to self-regulating security tokens, Polymath is fundamentally revolutionizing the securities market.
Help build the Polymath platform by joining our Telegram Community.
Let the stampede begin.