Client Profile
The client is a Web3-native financial services platform offering DeFi lending, staking, and stablecoin services to institutional investors and retail users. Headquartered in Singapore and operating globally, they faced intensifying compliance demands under FATF, EU MiCA, and SEC regulations. The client needed a scalable compliance framework that could enforce KYC/AML, wallet screening, and transaction monitoring across multiple blockchains without compromising decentralization.
Challenges Faced
Key security concerns included:
- Difficulty meeting FATF Travel Rule and MiCA requirements across DeFi operations
- No existing wallet screening or on-chain KYC enforcement
- Regulatory uncertainty in multiple jurisdictions
- Manual compliance reporting and lack of audit trails for smart contract actions
Solution
COE Security implemented a robust Blockchain Compliance Toolkit, combining:
- Wallet Screening Integration: Automated blacklisted wallet flagging via Chainalysis & TRM API integration
- Travel Rule & KYC Modules: Enabled pseudonymous compliance through zero-knowledge KYC attestations
- Smart Contract Logging for Auditability: Introduced tamper-proof logs and compliance triggers within contract code
- Regulatory Mapping Engine: Matched transactional behaviors with applicable regulations across jurisdictions
Streamlined Compliance Across the Chain
- Screened 50,000+ user wallets against global sanctions lists and OFAC/UN blacklists
- Logged every smart contract action (mint, transfer, stake) into a verifiable audit trail
- Automated suspicious transaction alerts for volume spikes and known laundering patterns
- Enabled zero-knowledge KYC for anonymous but compliant user onboarding
- Reduced manual effort by integrating reporting workflows with compliance dashboards
Regulatory Alignment & Governance Strengthening
- Aligned DeFi operations with FATF Travel Rule, MiCA guidelines, and US SEC token classifications
- Implemented on-chain policy controls via smart contract-based compliance gates
- Trained the client’s compliance team on blockchain AML/CFT frameworks
- Created a compliance readiness checklist with risk categories and jurisdiction-specific triggers
Blockchain Regulatory Assurance Suite
- Wallet Screening & Risk Scoring
- On-chain KYC & Travel Rule Integration
- AML/CTF Monitoring for DeFi
- Token Compliance Risk Scanning
- Smart Contract Audit Logging
- Jurisdiction-Based Compliance Mapping
- Regulatory Reporting Dashboards
- Compliance Trigger-Based Smart Contract Controls
- GDPR & Data Privacy Protocol Mapping
- Digital Identity & Credential Verification Solutions
Implementation Details
- Integrated compliance tools with smart contracts on Ethereum and Avalanche
- Deployed ZK-proof-based KYC for privacy-preserving onboarding
- Connected TRM Labs wallet monitoring with SIEM for real-time alerts
- Delivered a modular compliance reporting dashboard with export-ready templates
- Provided audit log encryption using IPFS and timestamped blockchain anchoring
Results Achieved
- Achieved regulatory readiness for MiCA and FATF in under 60 days
- Reduced manual compliance reporting efforts by 80%
- Detected 27 high-risk wallet interactions before fund compromise
- Gained approval from two institutional partners due to verified compliance tooling
Client Testimonial
“With COE Security’s Blockchain Compliance Tools, we now face regulators with confidence. The blend of privacy, automation, and transparency is exactly what we needed to scale compliantly.”