The Future of Regulatory Compliance in Defi Space - ERP Spain.com - España y América Latina

Coinfirm AML Oracle was the first smart contract-based solution for AML compliance of the burgeoning decentralized finance (DeFi) scene. The Oracle unlocks a key barrier that DeFi presented to previously developed blockchain compliance technology on the market. Because DeFi protocols run on-chain smart contracts – meaning that any compliance layer needs the same format of technology required to interact with a DeFi provider such as a decentralised exchange (DEX) through client smart contracts – a specifically tailored solution is necessary. Currently operated with Ethereum and RSK protocol, the Coinfirm AML Oracle is that solution – enabling decentralized entities to continue their lending, staking and general DeFi activities without fear of falling afoul of nefarious actors in their system – with an added emphasis on security and cost-effective gas usage. The Financial Action Task Force's updated draft guidance from 09.03.2021 massively expands the types of entities falling under the FATF’s purview. The updated guidance requests member states to ensure DeFi platforms are covered by AML laws, even if there is no single party responsible for live networks. The Coinfirm AML Oracle offers both a partial and fully decentralized solution to proactively manage compliance risks and comply with regulations. When users interact with a decentralized finance provider, their wallet address is queried for risk through the Coinfirm AML Oracle, which in turn passes data from Coinfirm’s API to generate a report ID C-Score based on 330+ risk evaluation scenarios that relays the information to the DEX.