Regulatory Framework v2.4KYC and KYB for tokenised securities: what issuers need to know.
A detailed educational guide covering why KYC/KYB matters, jurisdictional requirements, and how FRACTIONED automates the process for institutional-grade compliance and global liquidity.
What is KYC/KYB and why does it matter?
Know Your Customer (KYC) and Know Your Business (KYB) are the cornerstones of anti-money laundering (AML) regulations. In the realm of tokenised securities, these protocols ensure that every participant is verified, preventing illicit activities while maintaining the integrity of the secondary market.
The KYC process: step-by-step
Identity Document Verification with AI-assisted OCR.
Liveness Detection to prevent biometric spoofing.
AML Screening against global PEP and Sanction lists.
Proof of Address and Source of Wealth validation.
KYB for Institutional Investors
Institutional verification requires deeper due diligence into Ultimate Beneficial Owners (UBOs), corporate structure charts, and legal entity identifiers (LEI). Our system maps complex ownership webs automatically.
Jurisdiction-specific requirements
Strict GDPR compliance and transfer of funds regulation.
Accredited investor verification and Rule 506(c) protocols.
Focus on VASP licensing and local MAS/SFC guidelines
Emerging VARA frameworks for virtual asset service providers.
How FRACTIONED automates KYC/KYB
We integrate directly with top-tier identity providers to provide a seamless, white-labeled onboarding experience. Our smart contracts automatically lock assets until verification is cryptographically confirmed.
Best practices for maximising pass rates
Ensure high-resolution capture, clear document edges, and consistent lighting. Providing localized language support during onboarding can increase completion rates by up to 40%.
Common pitfalls and how to avoid them
Avoid outdated document types and low-quality biometric scans. Fragmentation between KYC providers often leads to drop-offs; use a unified stack like FRACTIONED for continuity.