Etonec and Mina Foundation to launch ZK-powered compliance tool by year-end

The company Etonec, which specializes in crypto payments, is partnering with Mina Foundation to launch a new tool for regulatory compliance in the decentralized finance (DeFi) and Web3 spaces. According to a press release on Thursday, the tool will use zero-knowledge (ZK) proof technology to address existing gaps in privacy and compliance. It will provide know-your-customer (KYC) and anti-money-laundering (AML) services on the Lumina DEX when it goes live later this year, powered by zkApps, which enables private and compliant transactions.

The zkp-ID solution will allow builders to satisfy the concerns of KYC and AML regulators around the world without requiring users to share sensitive personal identifying information, said Kurt Hemecker, COO of Mina Foundation.

Etonec’s partnership with decentralized exchange Lumina DEX will create a permissioned pool, a liquidity pool market that is compliant with AML regulations, using zero-knowledge technology. This will hopefully attract more institutional investors to the DeFi community and help it grow, according to Jonathan Knoll, co-Founder and head of strategy at Etonec.

The compliance tool is not only designed for decentralized protocols, but also aims to serve a wide range of applications across the Web3 space. “You’re gonna have a large number of use cases…where you can allow users to control their own data, privacy and to decide who and what they want to share information with,” said Hemecker.

The DeFi sector has increasingly become a target of regulators’ efforts to assert greater control over the crypto industry. In April, the U.S. Treasury Department issued a precedent-setting illicit finance risk assessment for the DeFi sector, as reported by Reuters.

Edited by Stephen Alpher.