We’re pumped.

At Wyre, we’re on a mission to help lower the barriers to entry for FinTech entrepreneurs by offering them compliant ports into a regulated fiat world. As part of an ongoing effort, today we are excited to share our interpretation of on-chain compliance. We feel this can help open the ecosystem to more users, and can push the ecosystem forward to help accelerate financial innovation.

The compliance landscape is pretty exciting, and we have had a really keen eye on it for the past few years. Identity isn’t a requirement to use any blockchain, it’s an even playing field to all that have an internet connection, regardless of location. The main reason for incorporating compliance is an entrepreneur’s natural enthusiasm to pour out a huge amount of resources into legal stuff instead of building cool products. Slight sarcasm there 😉.

Personally, I wouldn’t wish the requirements/expectations on any entrepreneur because it is incredibly stressful, distracting, and expensive (not just money, more importantly a team’s time to market). But to play ball in any given jurisdiction, companies have to report to and comply with local regulatory bodies. It’s also important to note that for now, we’re focused on on-chain compliance, not on-chain identity — more on that in future posts!

In an ecosystem full of open and secure technologies, current compliance processes are archaic and isolated within some of the leading regulated service providers. With the introduction of various new on-chain innovations, we’re presented with the opportunity to help reduce the barriers-to-entry while increasing security and compliance, allowing for broader institutional participation.

As part of our release on Tuesday, Wyre, a regulated service provider, will allow verified users to opt-in to receive an ERC-721 compliance token. This token is minted from licensed parties, e.g. Wyre, and applied to a verified user’s Ethereum wallet of choice. The token is similar to the blue checkmark on Twitter and is our first step towards bringing compliance on-chain.

For a first use case, this token will allow users to compliantly trade on a growing list of decentralized exchanges .

We understand that we can’t do this alone, it needs to be community driven, and we’re happy to announce that a growing list of industry leaders have signed up to support this initiative.

For further reading, we have published a few posts to help articulate some of the complexities around compliance:

How does this work?

Using the example of trading on a decentralized exchange, there will be three parties involved: