IDnow has partnered with a consortium of industry leaders, including the IOTA Foundation, walt.id, SPYCE.5, and Bloom Labs, to ensure compliance with the European Union’s Anti-Money-Laundering (AML) and Transfer of Funds regulations for Crypto Asset Service Providers (CASPs) and self-hosted wallets. The consortium aims to overcome the challenges posed by the General Data Protection Regulation (GDPR) in storing personal identifiable information (PII) on the blockchain by introducing soul-bound tokens (SBTs) for identity verification. These tokens allow for user identification without revealing PII, maintaining trust and transparency in crypto asset transactions. The IOTA Foundation will provide the necessary network infrastructure, walt.id will develop a trusted witness service, IDnow will contribute its expertise in identity verification, Bloom Labs will enhance the system with wallet capabilities, and SPYCE.5 will ensure seamless interchain communication and transaction validation. Experts from the consortium emphasize the importance of balancing regulatory compliance with user experience and maintaining integrity in the crypto industry. Overall, this partnership represents a significant step towards a regulatory-compliant future for crypto assets in the EU, promoting privacy and security for users.
