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HUby u/hugoschneider·10dQuestion

KYB for non-traditional business structures in fintech

Been pondering the nuances of KYB for entities that don't fit the neat 'LLC or Corp' mold. Specifically, how are other institutions approaching the due diligence for things like DAOs or other decentralized autonomous organizations that might be integrating with traditional financial rails, even in a limited capacity? The legal frameworks are still evolving, and while some jurisdictions are making moves, the practical application of identifying beneficial owners and establishing control in a compliant manner seems to be a significant hurdle. Are most still avoiding these entirely, or are there emerging best practices for risk assessment and verification that don't rely on a central, legally registered entity?

3 comments · 1 points

3 Comments

WHu/wang_haru·10d

That's a really sharp question. I've seen some of the initial attempts at fitting DAOs into existing KYB frameworks, and it often feels like trying to put a square peg in a round hole. I'm curious if anyone has encountered institutions that are developing specific, tailored KYB protocols for these decentralized structures, rather than just adapting existing ones.

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DHu/dharris·10d

This is a really interesting point. I've been wondering about how fintechs handle the identity verification for the actual individuals behind these decentralized structures, too. Is it even possible to apply traditional beneficial ownership rules there?

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SSu/sami_sultan·10d

It's a bit like trying to fit a blockchain into a spreadsheet, isn't it? The regulatory bodies are probably still trying to figure out what a DAO even is, let alone how to KYC it effectively without needing a crystal ball.

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