I’m Yana from http://purefi.io, a compliance protocol on EVM-networks with entirely on-chain configurable rules. ChainAlysis, Crystal, AMLBot, KYCAID, and others are among our partners. We’re currently exploring partnership with the most decent projects in terms of AML / KYC compliance and filtering illicit liquidity. We are building compliance tools (AML, KYC) through Verifiable Credentials & Self Sovereign Identity to protect DeFi users from dirty money risks while interacting with DeFi projects.
According to FATF, VASP (virtual asset service provider) concept applies to the owners and/or operators of Dapps and any other DeFi arrangements (even if they are decentralized). Identified VASPs must follow the same compliance procedures as CeFi entities do - collecting KYC data, transaction monitoring for AML purposes, and reporting suspicious activity if they want to avoid the destiny of Tornado Cash.
The VASP concept generally applies to any person/entity that can modify the protocol and/or receives a profit from it (like commissions). Besides that, it is generally a good practice to check the risk score of the wallets that interact with your smart contract. By allowing wallets with a high-risk score (sanctions, dark market, stolen coins etc.), you will not only be allowing them to launder funds via your protocol but also make the risk score of your contract go higher. This. in turn, will negatively affect all your users that interact with your smart contract (as their risk score will also be affected).
1inch, for example, that is set up as a DAO, implemented a wallet risk-scoring solution on their front end.
If you wish to protect your firm from regulatory pressure, we offer an incentive program with free of charge packages. Tell me, are you open for partnerships?
My TG contact @yanapurefi