Compliance Framework

🚧 This page is still under development

Executive Summary

CapSign's compliance framework integrates traditional regulatory requirements with blockchain technology to create a transparent, immutable, and decentralized compliance system. By leveraging the Ethereum Attestation Service (EAS), CapSign provides a secure and verifiable method for maintaining regulatory compliance across digital asset offerings.

Decentralized Compliance Architecture

Ethereum Attestation Service Integration

CapSign utilizes the Ethereum Attestation Service as the foundation for its decentralized compliance infrastructure. This approach offers several key advantages:

1. Immutable Verification Records: All compliance attestations are recorded on-chain, creating a permanent, tamper-proof record of verification.

2. Decentralized Validation: Compliance checks can be independently verified without relying on central authorities.

3. Portable Credentials: Once verified, attestations can be used across compatible platforms without requiring re-verification.

4. Privacy-Preserving: Only cryptographic proofs of attestations are shared, keeping sensitive personal information secure.

Attestation Schema Framework

The CapSign compliance system is built around three core attestation schemas:

1. Customer Identification Schema

This schema captures essential KYC/AML elements while maintaining user privacy:

• Identity verification (government-issued ID validation)

• Address verification

• Risk assessment indicators

• PEP screening results

• Sanctions screening status

• Verification timestamps and expiration dates

Each attestation is linked to a wallet address, creating a verifiable on-chain record that the owner has completed the required identification process without exposing personal information.

2. Investor Qualification Schema

This schema addresses accreditation requirements and investment eligibility:

• Accreditation status (accredited vs. non-accredited)

• Qualification criteria met (income, net worth, professional certification)

• Investment limits based on regulatory categorization

• Verification method used

• Attestation validity period

• Jurisdictional qualifications

These attestations enable compliant participation in regulated offerings without repeatedly sharing sensitive financial information.

3. Investor Jurisdiction Schema

This schema handles the complex requirements of cross-border compliance:

• Residency jurisdiction(s)

• Tax jurisdiction(s)

• Regulatory restrictions applicable to the investor

• Jurisdictional investment permissions

• Geographic restrictions

• Compliance with local securities laws

• Jurisdictional transfer limitations

Implementation Methodology

Verification Process

1. Document Collection: Secure upload of identity documents through the CapSign interface

2. Verification Processing: Multi-layer verification including automated and human review

3. Attestation Creation: Generation of cryptographic attestations stored on Ethereum

4. Compliance Verification: Real-time compliance checking against regulatory requirements

Continuous Compliance

CapSign monitors attestation expiration dates and regulatory changes to ensure ongoing compliance:

• Automated notifications for expiring attestations

• Regulatory change monitoring

• Compliance remediation workflows

• Periodic re-verification requirements

Risk Management

Regulatory Risk Mitigation

• Jurisdictional coverage across major financial markets

• Regulatory update monitoring

• Adaptable attestation schemas to accommodate changing requirements

• Comprehensive audit trails

Technical Risk Mitigation

• Cryptographic security for all attestations

• Smart contract auditing and security review

• Redundant verification systems

• Privacy-preserving data handling

Conclusion

CapSign's compliance framework represents a paradigm shift in regulatory compliance for digital assets. By leveraging blockchain technology through the Ethereum Attestation Service and purpose-built attestation schemas, we enable:

• Reduced compliance costs through reusable attestations

• Enhanced privacy through cryptographic verification

• Improved regulatory confidence through immutable records

• Streamlined investment processes while maintaining strict compliance standards

This framework provides the foundation for a more efficient, secure, and accessible financial system that meets or exceeds traditional compliance requirements while embracing the possibilities of decentralized technology.