New ZK-Powered Compliance Tool Solves DeFi Privacy Gaps

New ZK-Powered Compliance Tool Solves DeFi Privacy Gaps

Etonec and Mina Foundation are launching a new zero-knowledge proof-powered regulatory compliance tool for the DeFi and Web3 spaces, addressing gaps in privacy and compliance by providing KYC and AML services on the Lumina DEX.

The product is designed to enable Decentralized Finance and Web 3.0 communities to comply with regulations while maintaining community members’ privacy.

Cryptocurrency payments company Etonec, in partnership with Mina Foundation, will roll out a new zero-knowledge (ZK) proof-powered regulatory compliance tool for the decentralized finance (DeFi) and Web 3.0 spaces, reports by a Thursday press release.

The tool will begin “address[ing] existing gaps within the privacy and compliance space” by  supplying know-your-customer (KYC) and anti-money-laundering (AML) services on the Lumina DEX when it goes live thereafter in the year, read the release The prototype is powered by zkApps, which enables private and compliant transactions.

“The zkp-ID solution will secure builders can do so in a way that helps satisfy concerns of KYC and AML regulatory authorities around the world without requiring users to share sensitive personal identifying information,” Mina Foundation COO Kurt Hemecker said.

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Etonec’s partnership with decentralized exchange Lumina DEX will use zero-knowledge technology to create a sort of permissioned pool, a liquidity pool market that is compliant with AML regulations. This will hopefully allow the Decentralized Finance community to attract more institutional investors to the space and grow, Jonathan Knoll, co- Founder and head of strategy at Etonec, informed CoinDesk.

The compliance tool isn’t solely designed for decentralized protocols. It likewise intends to serve a wide range of applications across the Web 3.0 space, the team behind its development informed CoinDesk.

“It’s broader than just DeFi,” Hemecker stated. “You’re gonna have a large number of use cases…where you can allow users to control their own data, privacy and to decide who and what they want to information exchange with.”

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protocols of  Decentralized Finance have increasingly become a target of regulators’ efforts to assert greater control over the cryptocurrency industry. In April, the United States Treasury Department announced a precedent-setting illicit finance danger assessment for the Decentralized Finance sector, Reuters reported.

Stephen Alpher.


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