Automated compliance, built in
Transfer restrictions, participant verification, and regulatory controls enforced at the infrastructure level — not application logic.
Compliance mechanisms
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KYC Verification
Identity verification managed per-asset, not globally. Different assets can have different regulatory requirements. Qualified investors only, jurisdictional restrictions — configurable per security.
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Authorized List
Pre-approved accounts allowed to hold an asset. Opt-in model. Only accounts on the list can receive transfers.
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Restricted List
Specific accounts excluded from holding an asset. Opt-out model. All accounts can receive except those on the list.
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Country Restrictions
Geographic restrictions on ownership based on investor country of residence. Enables compliance with Regulation S (excluding US persons), sanctions, and jurisdictional regulations.
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Lock-up Periods
Time-based transfer restrictions. Partial locking (specific units, not full balance). Multiple tranches with different release dates for vesting schedules. Automatic unlock via scheduled maintenance.
Per-asset model
Why compliance is per-asset
Traditional finance does KYC once at institution level but runs product-level suitability checks for each investment. DACS combines both: identity verification is managed per-asset because different securities have different investor qualification requirements. An investor verified for one asset may not yet qualify for another.
Enforcement at the infrastructure level
Compliance rules are enforced at the infrastructure level, not by application logic. A transfer that violates a rule is rejected automatically — there is no way to bypass restrictions through the API or UI. This provides a stronger guarantee than traditional application-level checks.
Compliance Officer vs Controller
| Compliance Officer | Controller | |
|---|---|---|
| When | Preventive — configures rules before issues arise | Corrective — intervenes when action required |
| What | Manages rules: KYC, authorized lists, country restrictions, lock-ups | Executes forced actions: mandatory transfers, forced redemptions |
| Analogy | Compliance department that writes policies | Officer who executes court orders |
| Example | "US residents cannot hold this asset" | "Transfer 10,000 units from Account A to B by court order" |
Related
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