Regulatory Compliance Engine

Our regulatory compliance engine ensures that all users meet the necessary standards for KYC/AML, fraud prevention, and jurisdictional compliance, while offering seamless interaction with the system. Here is the full list of checks and processes we automatically perform.

Comprehensive Regulatory Compliance Framework

KYC/AML Compliance Checks

Our automated KYC/AML system provides instant verification and risk assessment for all users.

1. Automatic KYC/AML Check

   1. Instantly performs all required KYC/AML checks for users.

2. Proof of Identity / Proof of Residency

3. Scoring mechanism categorizes users into:

   1. Green: Automatic pass.

   2. Yellow: Possible manual override.

   3. Red: Requires review and report download for filing.

4. Country CPI Score (Corruption Perception Index)

   1. Uses CPI score to assess risk based on the user’s location.

5. Request Additional Documents

   1. Examples include:

      1. Source of funds (individuals).

      2. Copy of the register of Directors (Enterprise customers).

KYT On-Chain Analysis and Categorization

The Know Your Transaction (KYT) system provides real-time blockchain transaction monitoring and risk assessment capabilities. It enables compliance with regulatory requirements by tracking and analyzing on-chain activities, identifying suspicious patterns, and maintaining comprehensive audit trails.

1. Initial Address Screening: Categorizes wallets into risk categories.

   1. Wallets would be categorized based on the rules into risk categories

      • Severe / High / Medium / Low

2. Ongoing KYT Monitoring: Continuous monitoring of user behavior.

   1. User Behavior alerts

   2. Risk Categories

AI-Driven User Categorization

The system essentially transforms complex regulatory requirements into an automated, user-friendly process while maintaining full compliance across multiple jurisdictions.

1. Regulatory Matrix: Set rules for licenses in different countries to ensure compliance with local regulations.

2. Automated Categorization: Classifies users into risk categories based on profile and behavior:

   1. Low Risk: No additional checks.

   2. Medium Risk: Possible additional verification.

   3. High Risk: Manual review or restricted access.

3. Real-Time Compliance Checks: Continuously monitors user data to ensure ongoing regulatory compliance.

4. Interactive Questionnaires: Users complete dynamic questionnaires that adapt to their responses, ensuring jurisdiction-specific compliance.

5. Eligibility Assessment: Ensures products are offered only to users who meet eligibility requirements based on their regulatory classification.

Fraud Prevention

Identifies suspicious activity including account takeovers, spam, and malicious bots.

1. Device Intelligence utilizing Smart Signals

   1. Bot Detection

   2. Browser Tampering

   3. Device Rooting

   4. Emulator Detection

   5. Virtual Machine Detection

   6. App Cloning

   7. Jailbreak Detection

   8. Frida Detection

   9. Location Spoofing

   10. VPN Usage

   11. Incognito Mode

   12. Privacy Settings

Geolocation Controls

1. UK Regulatory Assessment Questionnaire

   1. The UK Questionnaire system implements FCA requirements for crypto asset service providers, ensuring proper assessment of retail clients' knowledge, experience, and financial standing. This system complies with:

      1. the FCA's Consumer Duty requirements

      2. and the UK's crypto marketing restrictions introduced in 2024.

Sanctions Compliance

1. Blocking access to Blade Labs products to users from sanctioned countries (or where crypto is illegal, e.g. China)

   1. Comprehensive list maintained in system

   2. Automatic updates

   3. Real-time checking

   4. Audit logging

UNSC Sanction List
Central African Republic
China (mainland)
Congo, Democratic Republic
Democratic People's Republic of Korea (North Korea)
Eritrea
Guinea-Bissau
Iran
Iraq
Lebanon
Libya
Mali
South Sudan
Sudan
Syrian Arab Republic
Yemen
Russia

OnChain Governance Controls

1. Token Management - Available Controls

   1. KYC flag on the token (it cannot be handled by a non KYCd user)

   2. Wipe, Freeze, Unfreeze

   3. Cash In, Burn, Get balance

   4. Grant KYC, Revoke KYC, Check KYC

   5. Rescue

Best Practices

1. Regular Updates

   1. Monitor sanctions lists

   2. Maintain compliance records

2. Audit Trails

   1. Keep detailed logs

3. Emergency Procedures

   1. Incident response

   2. Disaster recovery

   3. Regulatory reporting

   4. Account freezing