Let’s start from the beginning.
What is KYC?
“Know your customer” involves a set of identity processes’ where an organization demonstrates to regulators that they have assessed various risks. These risks include – money laundering, terrorism financing, credit worthiness and product suitability. These checks must be carried prior and throughout any business relationship with the customer.
TRACETO.io is setting out to solve the problem we see with KYC and the crypto-currency space. This is that current “real world” framework is not amalgamating smoothly with the digital world. Regulators just can’t keep up with the advancement of technology.
Traceto is creating an inclusive KYC Network and DApp solution for crypto-currency market participants. They aim to do this by fusing smart contracts and artificial intelligence through a Decentralised Application – built on the Ethereum Network.
“Leveraging on over 5 decades of experience in compliance amongst the founding team and advisors, TRACETO.io seeks to revolutionise the e-KYC process, bridging the gap between physical and virtual world KYC processes.”
CYNOPSIS SOLUTIONS Traceto is powered by Cynopsis Solutions, which was established in 2014. Follow the link below for a deep insight into this company.
Cynopsis specialise in helping clients in the Financial Services Sector and the Professional Services Sector better comply with ever-increasing regulatory requirements – Anti-Money Laundering (AML), Know your Customer (KYC) and Counter Terrorism Financing (CTF).
Over the last decade, AML and CTF measures have cost the banking and finance industry at least US$321billion annually since the Global Financial Crisis and the cost of compliance continues to rise.
Fuel this with the complexities brought on with the rise of digital technology and digital assets – there are some complicated inconsistencies that Traceto look to overcome for crypto-related companies and business’.
These inconsistencies are as follows: 1. A false assumption that anonymity overrides the need to comply. 2. A low priority allocated to compliance due to its perception as being a cost centre. 3. A lack of budget and experienced compliance personnel handling this process.
Traceto’s mission is to tackle these current problems. They aim to do this by creating a digital KYC network (DApp) that not only allows the decentralised ecosystem to comply with KYC standards prescribed by the Financial Action Task Force (FATF), but is decentralised, privacy preserving and self-sustaining.
The network intends on providing incentives to users to organize themselves in a symbiotic relationship with each other that guarantees privacy yet complies with regulatory requirements.
“Giving ownership, management and control of the KYC process back to the people.”
TOKEN USE CASE
The Traceto T2T token is used as a utility token within the ecosystem and has the following uses: – T2T activates smart contracts on the network – T2T payments are made by request ers in for KYC services for their customers – T2T is staked by verifiers for rewards – T2T can be used to incentivise prospective clients and partners – T2T is used as a medium of exchange for participants on the network – Each time T2T is spent to procure KYC services, a small percentage is burned.
Why tokenise this?
Current KYC systems are failing with the ever-evolving tech space. With this -regulators are being left behind. The constant threat of hackers exposes users to identity theft and identity fraud through false actors amongst many other compounding concerns.
The whole KYC process can be secured and distributed through the blockchain by utilizing its reach, security, anonymity and decentralisation. Traceto can create a self-governing and a secure KYC system for every user. How will these tokens provide value to the investor? T2T tokens create the economy that keeps the network afloat. The tokens are used for fee’s, rewards, staking and are even burnt reducing the circulating supply. As the network gains users and adoption, the circulating supply will diminish as the demand grows – basic economics, supply/demand.
FUNDAMENTALS The Traceto network consists of: users -> verifiers -> corporate requesters -> DApp interface -> network Users – individuals on-board with Traceto Verifiers – trusted user auditing/staking to earn T2T Corporate requesters – Exchange, ICO, crypto-business’ DApp – easy to use decentralised application interface Network – Traceto network, utilises AI algorithms Lets use an example…
A user wants to join an ICO that is utilizing the Traceto network. Such user will be redirected to the Tracetos DApp to upload their documents. These documents are then encrypted and stored within the application.
Next a trusted verifier will conduct a background check on this user and score the data based on social profiles – these verifiers are trusted users that stake T2T. Verifiers must undergo a vigorous check and are also gatekeepers to this data.
*I have a concern regarding this process currently – I have asked for conformation from the team regarding the “specific” role of a verifier, whether it’s just acting as a node operator or if they are trusted to check over the data. This question is still unanswered and until clarification, will bring down the operating concept score*
Once verified this data is stored in a secure and encrypted vault and can only be decrypted by the user themselves or upon quorum from the verifier and requester for KYC purposes.
THIS BRINGS ABOUT TRACETO AND AI.
Traceto A.I uses existing algorithms determining facial recognition and similarities. They plan on improving and developing more algorithms through “open sourcing” development.
“We attempt to open source as many of these algorithms as possible, allowing the community to audit and improve on the A.I tools involved in solving the KYC Problem.”
Traceto plan to use A.I as a complement to the community and not an invasive tool.
The solution Traceto propose is one that: – upgrades an out of date service – is self-governing – utilizes blockchain technology – has a token economy – is decentralised – is scalable – has large business connections for adoption
ROADMAP Initially, Traceto will focus on AML and CTF problems but plan to expand their scope to address questions related to Product Sustainability and Credit Worthiness.
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Cynopsis’ partnerships include: Dow Jones, Amazon Web Service, RHT and more.