ARC: Appoint Securitize as a Whitelister to Aave Arc

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Securitize, a digital asset securities firm, has proposed to the Aave Governance community to become a whitelister for Aave Arc deployments, offering KYC, KYB, AML, CFT, and other compliance services via its Securitize iD for DeFi. Despite some concerns about potential contradictions with decentralization, the proposal has received 99.98% positive feedback from the community, aiming to provide a compliant environment for institutions to comfortably use DeFi applications and services.

Securitize, a leading digital asset securities company, has proposed to the Aave Governance community to be appointed as a whitelister for one or more deployments of Aave Arc. Securitize is a highly regulated firm with a strong track record in providing compliance services to digital assets companies. It has launched Securitize iD, a digital identity service that offers KYC, KYB, AML, CFT, and other compliance services to almost 400K registered users. The service has been used by over 200 issuers of digital asset securities, including Exodus and Centrifuge. Securitize iD for DeFi is designed to be easy to use, minimize the economic burden of transacting with complex on-chain processes, protect user data and privacy, and provide DeFi protocols with on-chain validation for users' KYC/KYB, accreditation, and qualification status.

Securitize has outlined a detailed process for whitelisting Aave Arc's users with Securitize iD for DeFi. Aave Arc is designed to ease institutional and regulatory concerns surrounding DeFi. It uses additional smart contracts to enable whitelisting functionality for a permissioned blockchain environment. All users must undergo a process that includes passing KYC/KYB checks, being onboarded with suitable disclosures, terms and prerequisites, and having their Ethereum wallet addresses granted distinct permissions before they can participate in network activities. Aave Arc transactions are also subject to AML/CFT screening and monitoring. These processes are carried out by an appointed whitelister, who is also responsible for maintaining KYC and customer due diligence documentation, conducting any other necessary compliance checks, and ensuring that any deployment of Aave Arc meets regulatory and compliance standards.

The proposal has received positive feedback from the community, with Eboado suggesting that Securitize should have a transparent discussion with Fireblocks to understand the nuances of integrating different whitelisting approaches in the common Arc layer. However, Fig raised concerns about the potential contradiction between KYCing new user wallets and the goal of decentralization and less regulation. In response, explained that Securitize is applying to be a whitelister for Aave Arc, which provides a sandbox environment for institutions. The aim is to help institutions become comfortable enough from a compliance standpoint to start using DeFi applications and services. The community sentiment for this proposal is overwhelmingly positive at 99.98%, with over 389K AAVE voting "Yes".

Posted 2 years ago

Last reply 2 years ago

Summary updated 2 months ago

Last updated 06/12 00:43