How DeFi and Web3 platforms can comply with KYC and AML regulations.
The ongoing boom in Decentralized Finance (DeFi) and Web3 has caught the attention of many people all around the globe. The engagement has quickly evolved the space into a place where many people operate daily, with new DeFi and Web3 platforms coming to life all the time.
Even though the space is snowballing, areas such as security haven’t been able to keep up. The lack of consumer protection means many platforms still need a comprehensive know-your-customer (KYC) process and anti-money laundering (AML) strategies.
We at Astra fight to get platforms set up with an unrivaled compliance layer and regulatory processes every day. The past months have shown why it’s a critical mission and that there is a long way to go before scams and frauds are eliminated.
The current state of the ecosystem and regulatory risks in DeFi
For many, DeFi might still be a very unfamiliar term, but at the same time, something that most should consider learning about very soon. The DeFi space aims to solve many general economic problems, such as access to financial tools that would otherwise be unavailable. DeFi will inevitably become mainstream, but only if the industry is prepared to address the current lack of security for users and businesses.
DeFi essentially offers the necessary financial instruments and opportunities as we already know them, but without people having to rely on banks, stock exchanges, or other third-party entities. The lack of intermediaries is attractive to those wishing to avoid paying high transaction fees and ensures users keep the majority of the profits.
With smart contracts and blockchain technology, DeFi works in a way where all transactions are recorded on the blockchain. With cryptocurrencies as a digital asset, having a third party involved in financial transactions is no longer needed.
The technology in the DeFi space is in many ways revolutionary, but there are still significant challenges to be faced before mainstream migration seems realistic. The general state of the Web3 ecosystem is at a place where a balance needs to be found between regulations and decentralized standards.
Decentralization is fundamental to DeFi, and Web3. Achieving this is a work in progress, as the fast-growing ecosystem still has flaws that can compromise the safety of people’s money.
Because the Web3 space has seen such a rapid boom, regulations, security, and other security protocols haven’t had time to adapt. In many cases, money has been lost to frauds and scams. This latest version of the internet is still in a place where people with ill intentions can take advantage of it and scam for money. Astra is here to change that.
Bringing compliance to DeFi and Web3 platforms through Astra
It’s essential to improve platforms’ security and ensure they comply with KYC and AML regulations to safeguard from scams and fraudulent behavior in Web3, especially DeFi.
Consumer protection is a big part of the Astra mission. It is an area where the Astra Solution can be a massive help for platforms which still lack general security and compliance. The Astra Solution will help DeFi and Web3 platforms achieve outstanding KYC processes and legal protection.
The solution works through the Astra decentralized compliance layer, which will equip DeFi smart contracts with KYC and AML capabilities. Platforms with the Astra Solution will see themselves resolve real-world compliance issues and get valuable expertise through our trusted legal firms.
The Astra Solution is a versatile product that will offer an all-in-one package to help cover all grounds needed for each platform. It doesn’t matter if it’s legal assurance, dispute resolution, a legal framework, or regulatory compliance — Astra will be able to deliver it all.
Web3 and DeFi cannot continue to grow at this pace without better compliance, and it needs to start today.
A Decentralized Compliance Layer for the Web3 Economy and Delivering the Compliant Blockchain for the future. 💪