US-based company Bluprynt recently finalised a pilot project aimed at fighting counterfeit cryptocurrencies using a Know Your Issuer new framework.
The crypto-focused compliance solutions fintech integrated its new Know Your Issuer into stablecoins from PayPal and Circle.
According to Blueprynt estimations, around USD 1.6 billion is lost each year by users who purchase or trade phony tokens. The company’s new solution aims to fight this by linking issuers’ credentials to assets on-chain.
What is Blueprynt’s main solution?
The company’s innovative solution is a crypto-native riff on Know Your Business (KYB). The due diligence process is used to check the legal status of a business, as well as its compliance with anti-money laundering (AML) international regulations, while establishing verified identities.
Blueprynt’s Know Your Issuer (KYI) takes these verified identities and attaches them to the digital assets. The solution is aimed at both individual investors and institutions. According to company officials, the solution can create a verifiable digital identity at the point of issuance, instead of using a TradFi accounting system or other Web2-based systems.
Unfortunately, institutions must meet compliance standards but can also be in conflict with permissionless ethos of decentralised finance (DeFi). Without proper regulations for customers, any individual can create a meme coin to resemble stablecoins or other cryptocurrencies through platforms like Pump.fun, which can further lead to losses. Even though self-custodial wallets like Phantom would show that particular meme coin was not pegged to the dollar, its resemblance in appearance to stablecoins could trick traders into buying it as legit digital currencies.
The market momentum
After a ‘crypto winter’ that significantly cut the pay checks of crypto traders worldwide, 2024 saw a new surge in trading, fuelled by the launch of many celebrity coins. Currently, according to crypto data provider CoinGecko.com, Circle’s USDC and PayPal’s PYUSD are among the largest stablecoins by market capitalisation, totalling USD 69 billion and USD 1.1 billion respectively.
After successfully integrating its KYI with Circle and PayPal, Blueprynt also announced its KYI integration with the Solana Attestation Service (SAS), that allows entities to publish attestations about tokens and addresses on-chain. By publishing their credentials through SAS, issuers can enable token verification for wallets or blockchain explorers.
