Built-in Compliance Framework
On-chain identities and Compliance modules
Last updated
On-chain identities and Compliance modules
Last updated
ERC-3643 brings compliance and control on top of the blockchain network. It is therefore not necessary to permission the whole blockchain as you can permission the tokens and the smart contracts you are using on this blockchain network.
Securities regulations are intricate and vary across different countries, but they do share certain commonalities:
One such similarity is the need to accurately identify the various stakeholders involved in the issuance of financial products, in order to determine their respective responsibilities and liabilities.
Another important aspect of securities regulations pertains to the investment offering and associated transactions, such as the distribution, booking, redemption, and transfer of securities between investors in the secondary market, which are often subject to limitations, restrictions, or guidelines.
The ERC-3643 protocol addresses both of these dimensions.
It represents stakeholders with on-chain identities, allowing for the definition of permissions and the assignment of rights and duties to each stakeholder.
Additionally, investment offering rules can be easily added through compliance modules, and the protocol can be enriched with other smart contracts to accommodate any specific rules desired for the tokens.
However, the fundamental principle is that stakeholders must be properly identified, recognizing that a blockchain wallet does not constitute an identity. To achieve this, a better system is required, one that employs account abstraction, which is why the on-chain identity system is crucial in ensuring the legal ownership of tokenized assets.
