TraceTo - a KYC platform for the safety of blockchain-based transactions

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With Internet evolves, the number of transactions made online has raised exponentially, which means it’s becoming harder for banks and governments to control money laundering and terrorism sponsoring. With the appearance of blockchain and Bitcoin, it became even easier to perform anonymous transactions.

In the recent years, the finance industry has spent billions of dollars on AML and CTF compliance – smaller companies and banks don’t have the opportunity to satisfy all AML and CTF requirements. Some of the businesses aren’t able to catch up with advancing technologies and fail to implement blockchain, or deliberately avoid it. Therefore, the modern financial industry faces the following problems:

  1. The compliance regulations in real and virtual worlds are different, and companies reap benefits of it.
  2. Compliance is seen as a very costly aspect, and some companies don’t pay it much attention being focused on the profit rather than safety.
  3. A serious shortage of budget and competent specialists to organize KYC processes in enterprises.

The role of KYC

Know Your Customer (KYC) is a system of verification processes aimed at establishing safety in the organization: it needs to prove to regulators that all kinds of risks have been assessed, including terrorism sponsorship, finance laundering, product quality, and so on. Therefore, before establishing any business interaction with a customer, the company verifies his or her personality and checks creditworthiness. At the moment, the range of tools used for KYC is limited, however, there’s a project that can advance the process.

What is is a KYC solution for cryptocurrency users that is driven by smart contracts and AI technologies. This initiative is leveraging to boost evolving of the e-KYC process and eliminate the gap between personality verification in real and virtual worlds.

At the beginning of development, TraceTo will focus on the problems of AML and CTF. The following methods will be exploited:

  • Profile Verification (face recognition, video, and optical character);
  • Search for blacklist screening;
  • Profile updating;
  • Transaction monitoring.

Further on, TraceTo will also check person’s creditworthiness (credit rating and story, bankruptcy history, etc.) and product suitability.


Can I benefit from

TraceTo is designed for several categories of users:

Corporate requesters are businesses that exploit KYC services of the network. They can access user databases and check who have undergone the KYC process. A requester can introduce new users who haven’t registered in TraceTo network yet.

A user is a person who has registered in TraceTo and has undergone the process of personality verification. Note that the accounts are being monitored continuously – therefore, the information will be always up-to-date.

A verifier is a person who performs KYC-related tasks (background check, screening, and so on) and is rewarded by T2T, the proprietary token. Note that user’s private information is shared only upon user’s consent, or upon special requests of verifiers and requesters.

As a User, you can be sure in the reliability of transactions and safety of your personal information – TraceTo encrypts personal assets and documents, which means they cannot be faked or deleted.


Social score – the key to trustless operations

So how can a business know that a user is worth the trust? DApp server as the major interface for users: a person needs to upload the information for identification and pass a test. Then the most interesting part comes: the KYC score is combined from several components:

  • α-score is gathered by going through Cynopsis screening service. It combs through terrorism watch lists.
  • β-score is assigned by verifiers: they check the social profile of the User.
  • ϒ-score is assigned by a friend (Invited User) who can verify person’s liveliness.
  • δ-score can be awarded by machine algorithms that monitor the user’s transactions to detect possible fraud and abnormal behavior.

The community verifiers can make the final decision: the combination of above-mentioned scores impacts the overall user’s score.

Bottom Line

TraceTo eases the process of personality verification and solves the problem of security by implementing blockchain and sophisticated encryption technologies. Combining machine learning intelligence with the community, it makes online financial sphere a safer place. Although the prototype hasn’t been launched yet, the project promises to revolutionize the way trustless transactions are being made and reduce the expenses on AML and CTF compliance.

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