Privacy Pool Compliance
Compliance for privacy pools. Proven, not exposed.
Prove a deposit is clean, verify a withdrawal, and disclose only when an authority has the right to see it. Users stay private. Issuers stay compliant.
Who this is for.
Privacy pool protocols
Add a compliance layer to deposits and withdrawals without turning the pool into a public ledger.
Issuers, exchanges and OTC desks
Accept funds that come from a privacy pool when you can prove they were screened.
Institutions
Use a private transfer and still keep a record an examiner can read.
Four services. One record.
Deposit screening (ASP)
An Association Set Provider screens a deposit against sanctions and blocklists before the pool accepts it.
Proof of Innocence
The user proves funds are not from a sanctioned or illicit source, without exposing their history.
Withdrawal verification
The receiver checks that a withdrawal carries a valid proof before the funds are accepted.
Disclosure on request
Scoped disclosure goes only to the authority that has the right to see it, and only when it is requested.
Blockchain Privacy Pools and AML Compliance.
Eleven chapters, published by AuditKey. Built on research from Duke University. The privacy pools whitepaper is the long-term thesis, not the screening playbook.
Why privacy pools need a compliance layer.
Stablecoin volume is moving to privacy pools, where forensic tools have no public log to read. The compliance check has to happen before the transfer is accepted.
The shift
| From | From | To | |
|---|---|---|---|
| Surveillance of every transaction | Attestation of clean funds | ||
| Forensics after settlement | Enforcement before the transfer is accepted | ||
| Address-based identity | Credential-based identity | ||
| One vendor's black-box database | Distributed Association Set Providers |
The next era of institutional adoption belongs to protocols that can shield proprietary transaction data while simultaneously proving compliance to regulators.