Shyft, a leading know-your-customer (KYC) and anti-money-laundering (AML) infrastructure provider, on Wednesday, published a whitepaper outlining the standardization of due diligence, compliance, and regulatory mandates for KYC/AML laws within the blockchain industry. Shyft's proposals, to standardize KYC/AML checks to regulated organizations via anonymous ‘creditability’ scores, has the objective of reducing execution time and costs while providing enhanced consumer data protections.
Shyft Chairman and Special Advisor to the OECD Joseph Weinberg said, in a statement, “What we’re trying to achieve at Shyft is very ambitious. The current processes used by financial institutions to handle regulatory compliance are broken and highly ineffective in preventing money laundering. Shyft is challenging the way the world looks at identity in order to make compliance more effective and efficient, and most importantly, unlock untapped capital and opportunities.”
The Shyft ecosystem will allow third-party Trust Anchors, like banks and other institutions that already perform KYC/AML compliance checks, to associate their findings with a users cryptographic signature, recorded in a secondary ledger that attests to the ‘creditability’ of an individual, offering insight into reputation without actually revealing identifying information. Third-party applications will then be able to retrieve this creditability score via encrypted channels to provide to regulators as needed. The Shyft ecosystem aims to leverage the decentralized nature of the blockchain to ensure the highest level of security for this user data, especially compared to those services that use centralized systems for their consumer data storage.
Contributions to the Shyft ecosystem can be made in a number of different ways, including acting as a Trust Anchor that provides data to the compliance layer of the ecosystem by performing KYC/AML registration typically provided by banks or other exchanges. Contributors can also develop applications that use this data to support compliance onboarding and maintenance for ICO token sales or other organizations that intend to issue currency or deal with large amounts of consumer finances.