The idOS offers a solution for those who need to navigate the intricate landscape of Anti-Money Laundering and Counter-terrorism Financing (AML/CTF) compliance. Recognizing the significance of AML/CTF in today's digital transactions, the idOS has been designed to address the unique challenges posed by the decentralized web3 environment.
At an international level, the Financial Action Task Force (FATF) recommends that financial institutions implement an AML program that incorporates a risk-based approach, highlighting the importance of a safe and effective Customer Identification Procedure (CIP). Identity proofing and verification, age verification, and initial AML screening are all examples of identification and screening processes that help ensure that risks presented by forming business relationships with customers are assessed, mitigated, monitored, and documented.
Fractal ID is the identity provider facilitating the initial integration for identity data deployment within the idOS and will screen and verify users’ data. In parallel, the idOS, as the identity layer of Web3, allows users across the Web3 space to manage and share their verified identity information with financial institutions in a decentralized environment whilst such financial institutions can rely on the idOS for storage and access to their user’s AML-related data.
In a later phase of the idOS' progressive decentralization, it is intended that other identity verification providers join and participate in the idOS as issuers. As a result, third parties (e.g. dApps) will have the freedom to choose the identity provider that better suits their compliance and internal specific needs for their user's onboarding while using the idOS to access the underlying AML-related data.
The above means it becomes possible to have identity providers in the role of issues within the idOS that can allow third-party compliance with AML regulations.