Aave’s Push for Institutional DeFi Gets Second KYC Provider Proposal


Securitize, a expertise supplier for issuing tokenized securities, is bringing its system of identification verification to decentralized finance (DeFi) because the world of “degens” inches nearer to Wall Street.

The agency, regulated by the Securities and Exchange Commission (SEC) and a holder of U.S. broker-dealer and various buying and selling system (ATS) licenses, proposed its know-your-customer (KYC) solution to DeFi lending platform Aave on Friday.

A group vote amongst stakeholders in Aave Arc, a KYC-compliant and institutional-grade model of the DeFi lending platform, will happen over the weekend (an identical course of to when Fireblocks sought to turn into a whitelisted custodian). Following the preliminary voting and suggestions, a closing submission of the so-called “Securitize iD” software is focused for mid-January.

Read extra: Aave Proposal Enlists Fireblocks to Aid DeFi Protocol’s Mainstream Finance Push

Global anti-money laundering watchdog the Financial Action Task Force (FATF) has been specific about DeFi gamers being held to the identical requirements as different “virtual asset service providers” like exchanges and over-the-counter buying and selling desks.

At subject is the necessity to determine who’s interacting with lending and borrowing platforms and liquidity swimming pools. Crypto’s built-in pseudonymity prevents establishments from aping in; the Holy Grail is preserving privateness whereas permitting verification of who you might be in actual life.

Securitize iD stats

Providing KYC when buyers are shopping for or buying and selling tokenized securities is one thing Securitize has been doing in step with regulators since 2017, defined the agency’s CEO, Carlos Domingo.

“We’ve always made sure wallets that interact with our protocol for securities are KYC’d,” stated Domingo in an interview. “And at the end of 2019, we released this Securitize iD for investors, where we, as a regulated entity, provide KYC services and then people can attach wallets to it in multiple blockchains.”

Domingo identified that Securitize iD has been a runaway success with over 400,000 customers of the system to this point. He additionally made clear Securtize’s work to make DeFi palatable to establishments might be fully open-source and attempt in the direction of interoperability between different platforms and blockchains.

“We can share an attestation on the blockchain that is completely anonymous, saying this wallet is OK for your protocol, according to the protocol rules,” Domingo stated. “It’s a decentralized way of sharing identity information but done in a privacy-preserving manner.”