Compliance & Security Layer: Embedded Regulation & Transparancy

In StakeStone’s Crypto-native Neo Bank, the Compliance & Security Layer elevates onchain finance from self-governing automation to a state of being regulatable, auditable, and verifiable. By embedding compliance logic, risk controls, and audit modules directly into the protocol core, this layer implements regulation by design—where oversight and innovation coexist at the technical level. Our goal is to establish a globally compliant yet transparently decentralized financial infrastructure, maintaining both regulatory alignment and crypto-native self-sovereignty.

Onchain KYC/AML Module: Compliance Proof with Privacy

Traditional financial systems rely on manual processes or centralized databases for identity verification and anti–money laundering monitoring. StakeStone replaces this model with an On-chain Compliance Identity Layer that uses zero-knowledge proofs to enable privacy-preserving compliance verification.

• ZKP-based Identity Verification:

  • Certified KYC providers validate user identity and risk profiles, issuing a ZK Compliance Credential. When interacting on-chain, users only present a proof, without revealing any plaintext personal information.

• Multi-level Compliance Mapping:

  • Each account carries a dynamic compliance status indicator (Compliant / Restricted / Pending), written directly into the account layer. This integrates seamlessly with EIP-7702's flexible authorization system, enabling transaction-level permission control.

• Cross-chain / Cross-jurisdiction Interoperability:

  • KYC/AML credentials can interoperate across multiple networks through bridges and cryptographic signatures, allowing StakeStone to maintain compliance across different countries and regulatory bodies.

This approach establishes a neo-bank version of “Know Your Wallet (KYW)”, ensuring that every account possesses a verifiable compliance identity without compromising user privacy

Programmable Regulatory Interface: From Manual Reporting to Automated Compliance Execution

StakeStone’s Crypto-native Neo Bank implements a Regulatory API Layer, enabling regulation compliance to be embedded directly into the banking system as executable code, rather than relying on reports or manual verification.

• API-level Regulatory Integration:

  • Regulatory authorities or compliance nodes can define rules via smart contract APIs, such as cross-border transfer limits, restricted address lists, and reporting intervals. Enabling the system to automatically validate compliance prior to transaction execution, ensuring preemptive enforcement.

• Automated Compliance Data Reporting:

  • Transaction and account data are encrypted and synchr to designated regulatory endpoints, guaranteeing real-time availability and tamper-proof compliance records.

• Compliance-as-Code:

  • Regulatory logic is parameterized and upgradeable, forming an evolving compliance framework where authorities from different jurisdictions can deploy their own rule templates on a shared protocol foundation.

This mechanism transforms regulation from an external oversight function into an intrinsic system capability—

Regulation becomes protocol; compliance becomes automatic.