Our fundamental purpose involves thoroughly examining regulations to combat money laundering and financial fraud. As we identify the challenges banks and other institutions face, we address these issues by leveraging the capabilities of blockchain technology. Our comprehensive research aims to enhance financial transparency, minimize risks, and improve compliance.
Research Papers
Enhancing Financial Integrity:
An Approach to Combat Money Laundering on the
Blockchain through AML and KYC processes
July 27th, 2023
Abstract
Money laundering is the act of making funds from illegal means appear as if they originate from
legal sources. To prevent this, there are Anti Money Laundering (AML) laws and Know Your
Customer (KYC) processes. However, cryptocurrencies pose a significant challenge to these preventive
measures as they offer an avenue to bypass such controls by leveraging their inherent
anonymity and their limited effectiveness of AML prosecution.
To combat money laundering through blockchain, this paper proposes a solution called KYCrypto.
The solution provides a holistic concept that links regulatory processes to a cryptocurrency. Further,
the paper introduces a smart contract that corresponds with the Ethereum Request for Comment
20 (ERC-20) standard. The smart contract provides tokens for whitelisted customers and
enables AML prosecution through its blocking function. The oracle is the bridge between off-chain
and on-chain processes. Thus, KYCrypto combines the advantages of the traditional banking system
with the potential of blockchain technology, leading to an approach to regulate the environment
within the blockchain.
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KYCrypto
The regulatory team proposed a solution called KYCrypto to combat money laundering through blockchain. This solution provides a holistic concept that links regulatory processes to a cryptocurrency. Further, the paper introduces a smart contract corresponding to the Ethereum Request for Comment 20 (ERC-20) standard. The smart contract provides tokens for whitelisted customers and enables AML prosecution through its blocking function. The oracle is the bridge between off-chain and on-chain processes. Thus, KYCrypto combines the advantages of the traditional banking system with the potential of blockchain technology, leading to an approach to regulate the environment within the blockchain.