COMPLIANCE, IDENTITY AND REGULATION

Zero-Knowledge Proof (ZKP)

A cryptographic technique that enables one party to prove a statement is true—such as ‘this wallet has passed KYC’—without revealing the underlying private data, enabling privacy-preserving compliance verification on public blockchains.

EXAMPLE

A ZKP-based compliance attestation lets an institution prove to a DeFi protocol that its wallet is sanctions-clean without disclosing its transaction history.

Relevant Roles and Functions

On-chain Role
Chief Identity & Access Management Officer
Function
Blockchain Identity Attestations
Cryptographic Authentication Systems
Digital Identity Frameworks and Interoperability
Wallet-linked Identity Credentials

Related Terms

On-Chain Compliance

The embedding of regulatory requirements—KYC/AML checks, transfer restrictions, investor eligibility rules, and reporting obligations—directly into token logic or smart contracts, enabling automated enforcement at the point of transaction.

Example

Securitize embeds on-chain compliance into tokenized fund transfers so that accredited investor checks run automatically before any secondary market transaction settles.

Permissionless Blockchain

An open blockchain network—such as Ethereum or Solana—where any participant can transact or validate without approval. These networks underpin most DeFi activity and public tokenization platforms.

Example

BlackRock chose to launch its BUIDL tokenized fund on the permissionless Ethereum network to maximize accessibility and composability with DeFi protocols.

Digital Identity

A verifiable, blockchain-anchored representation of a person’s or institution’s credentials—such as accredited investor status or KYC clearance—that can be presented on-chain without exposing underlying personal data.

Example

WisdomTree's tokenized fund platform uses digital identity attestations to automate investor eligibility checks at point of transfer, replacing manual subscription document review.