The Challenge 

A Decentralized Autonomous Organization (DAO) was preparing for a token distribution round and needed to onboard Simple Agreement for Future Tokens (SAFT) investors. The DAO faced significant challenges in ensuring that the investors were compliant with FATF standards and free from any potential risks that could jeopardize the token distribution process. The complexity of the digital asset space and the anonymity of blockchain transactions made it difficult to identify and mitigate these risks effectively as the project had already taken in the subscriptions in kind and this needed remediation together with KYC screening. 

Our Solution 

Provenance was engaged to provide comprehensive KYC/KYB and On-Chain Analytic Checks to assess the risk profiles of the SAFT investors. Our approach included: 

• Compliance Verification: We ensured that all investors met the necessary FATF requirements, including KYC (Know Your Customer) and AML (Anti-Money Laundering) standards. 

• For High Risk investors Enhanced Due Diligence: We conducted thorough background checks on the investors, including adverse media screening and verification of their identities and financial backgrounds. 

• On-Chain Analytics: Utilizing advanced blockchain analytics tools, we examined the transaction histories, patterns, and associations of the investors’ wallets. This helped us identify any links to high-risk activities, such as involvement with mixers, sanctioned entities, or other suspicious behaviors and could successfully remediate the project. 

Results and Impact 

Our detailed analysis revealed several investors with potential compliance risks, including indirect exposure to sanctioned entities and high-risk activities. Based on our findings, the DAO made informed decisions to exclude these high-risk investors from the token distribution round. This proactive approach helped the DAO: 

Mitigate Risks: By excluding non-compliant investors, the DAO avoided potential regulatory scrutiny and penalties. 

Enhance Investor Trust: The thorough vetting process increased confidence among compliant investors, knowing that the DAO prioritized security and compliance. 

Ensure Smooth Token Distribution: With a clear understanding of the risk profiles, the DAO was able to proceed with the token distribution round without disruptions or delays. 

Value as a Partner 

Provenance’s expertise in enhanced due diligence and on-chain analytics provided the DAO with a robust risk management framework. Our proactive, data-driven approach enabled the DAO to navigate the complexities of the digital asset space confidently. By partnering with Provenance, the DAO ensured that their token distribution round was secure, compliant, and successful, ultimately protecting their reputation and fostering long-term growth.