- The Stellar Development Foundation (SDF) and Elliptic have partnered to integrate Elliptic’s compliance tools within the Stellar network.
- According to SDF, compliance tools are critical to paving the way for broader adoption of blockchain technology and digital currencies.
The Stellar Development Foundation, together with its partner Elliptic, a leading provider of crypto risk management solutions, yesterday published a webinar on how the Stellar (XLM) network can grow in a secure and compliant manner. Cadace Kelly, SDF’s Director of Legal, explained that regulatory compliance is also a key issue in the blockchain, particularly in the area of payment transactions.
In the area of payments, AML and KYC regulations must be complied with to protect against illegal transactions such as the financing of terrorism, fraud and money laundering. To ensure this, the SDF has partnered with Elliptic to integrate their compliance tools into the Stellar Lumens network to ensure that assets issued on the Stellar network meet regulatory requirements.
As Kelly describes, Stellar has built-in protocol-level capabilities that allow organizations to issue assets to Stellar and perform compliance checks at every point in its lifecycle, from issue to withdrawal. However, while the Stellar protocol provides the functionality to perform the appropriate compliance checks, the burden of properly performing these checks falls on the organizations that rely on Stellar.
This task can be overwhelming due to the amount of data involved, which is why Elliptic has developed tools to handle the checks. AML compliance software and its forensic capabilities help companies identify suspicious wallets and transactions without collecting sensitive personal information. Regarding integration and partnership, the SDF noted:
It’s important to remember that while Elliptic is a preferred partner to Stellar — they are the first and only service that has integrated with the network — the use of their services is certainly not mandatory. This partnership simply adds another tool for businesses to use to manage risk.
During the webinar, Kelly presented the integrated compliance tool in a wallet. In addition, the SDF explained in a blog post that compliance tools are the key to broader adoption.
These tools are key to broader adoption. For the industry to mature and overcome the skepticism that regulators and law-makers have developed, we all need to address the risks of bad actors taking advantage of the attributes of blockchain technology that help them try to hide illicit activity. […] These compliance tools really are critical to helping pave the way to greater adoption of blockchain technology and digital currencies.
