What do we do
SmrtSgn is a regtech startup which can help effectively regulate the markets of Virtual currencies (according to AMLD5) and Decentralized Securities and Finances.
And why it is important
Blockchain is an excellent technology, which is an important step in the development of human civilization. It has the potential to significantly improve the life of every person on Earth by creating things that are still new in our time:
- Crypto currency market
- Decentralized finances
- Decentralized Legal Agreements
But new opportunities also pose new challenges.
Our Line Of Products:
SmrtSgn product is a unique one, and it caters to both individuals and financial companies.
Considering how important signatures are to financial institutions, our product fixes the fact; that individuals can now be identified easily, without presenting any further proof. How are we able to make that happen? It is through our mobile app and website that has a user-friendly interface and promotes ease of navigation, making it easy and flexible for any individual to:
- Sign contracts
- Pass the KYC
- Register a signature that is easy to identify
Technically most companies will be more effective with customer relations by imbibing this solution that we are providing. With our software and web application form, it would be much easier for companies to:
- Identify customers via their SmrtSgn signature
- Easily access customers profile using the SmrtSgn systems
- Cut-down on fraudulent activities
Blockchain technology is one of the most outstanding achievements of mankind and is on the list of the most interesting areas of research due to its potential for widespread application in many areas. But also it is a source of the following challanges:
There are several technical issues in the field of cryptography that could significantly improve the adaptation of blockchain technology to the needs of modern business. But before carrying out technical research and work on software development, it is necessary to conduct a study of all aspects concerning compliance with current legislation. After legal analysis, a market analysis should also be conducted.
SmrtSgn's strength would be in its focus on bringing companies and even entire markets in full compliance with the regulations of financial institutions which of course, is not an easy task. At the same time, according to our philosophy, projects that have the same goals are partners of SmrtSgn.
SmrtSgn has a mission to prevent the use of the financial system of a country or a specific financial institution to legalize proceeds of crime or the financing of terrorism, and at the same time, make the crypto market safer for honest market participants.
With this as the main goal, SmrtSgn will cooperate primarily with national regulators, as well as all participants in financial markets, and innovative companies that work towards the same goal.
How it works
Service records the fact that the user has passed the KYC procedure using a special text of the legal agreement between the user and the service. The text describes the fact of passing a certain procedure and indicates that from this moment the user's public key is his identifier in certain situations prescribed in the contract. The private key is his electronic signature, with which he can sign other agreements published on the blockchain. The document is written into a smart contract and signed by two parties on the blockchain.
Within the framework of the project, sets of template contracts were developed, as well as various SDKs for integration into #fintech projects. Thus, the SmrtSgn startup is, first of all, an innovation in the field of RegTech with elements of LegalTech and FinTech.
SmrtSgn is becoming the standard AML compliance tool for identifying cryptocurrency (Virtual currency). holders under AMLD5. Obviously, the use of blockchain technology by the financial sector implies the need to create such systems. SmrtSgn seamlessly integrates with Open Banking and Mobile Banking. Finally, SmrtSgn is capable of serving new Decentralized markets and especially DeFi in the future.
The success of any endeavor depends on the people. We believe that the business we are starting is good. Each of us is full of inspiration and determination to overcome any difficulties.
Having a deep understanding of the technical part of the issue and resources for practical implementation, we do not claim to have a monopoly on knowledge and will be glad to cooperate.
Maxim VasilkovEntrepreneur, Founder, Programming Book author
Anastasia SarlidouMobile applications designer and geek programmer
Simon PapazovA software developer expert. Open Source believer
According t.o the AML5-6 Directives of the European Union, all transactions in currencies are subject to regulation and compliance. Cryptocurrencies, have been defined as virtual currencies in the said directive, and thus they also fall under this regulation. Thus, in addition to FX and stock brokers, the crypto exchange industry already reacted and they do KYC procedure for 100% of their customers. Still, there are Decentralized Exchanges and other Decentralized Finance (DeFi) projects which have yet difficulties to follow the compliance requirements.
As it was mentioned in the previous paragraph, DEX, DeFi and other decentralized financial projects can have problems with regulation. In general, a decentralized blockchain ledger is similar to a database which is stored on many computers simultaneously. In addition, there are programme codes (apps) which also can be distributed and executed on many computers simultaneously. This kind of distributed application is also called smart contracts.
Problems appear when these kind of apps are programmed to perform financial operations, such as crypto currencies exchange, giving loans, etc. Due to the decentralized nature of the exchanges, there is no real person to check any transaction (in code we trust). Therefore, no compliance check can take place during the transaction. If these transactions do not abide with compliance regulations, then a potential issue would be that some authorities would seek to prohibit the apps generating them.
Just to give you a glimpse of how fast-growing these blockchain-based financial projects/applications are, Forbes has estimated that the capitalization of the decentralized finance (DeFi) market has grown from $686 million on January 1, 2020, to $15.6 billion just one year later.
SmrtSgn helps decentralized, blockchain-based projects by performing the KYC procedure for the crypto wallet holders and creates a special kind of registry on the blockchain, in the same space where our client’s decentralized app works. If the person behind the crypto wallet is valid in the SmrtSgn smart contract blockchain record, then this is a legal transaction and the app can operate/execute.
This type of smart contract allows the decentralized apps to abide with compliance regulations and work legally, while remaining decentralized at the same time. The only other alternative would be for decentralized projects to create their own Compliance/KYC department which would not only increase the project’s costs but would also cause them not to be decentralized any more.
The solution described in the previous paragraph means that for every person who wants to have a KYC record in SmrtSgn we have to perform at least one blockchain transaction. The cost for such transactions depends on the type of blockchain platform used. For example, the cost of a transaction in Ethereum, the second biggest public blockchain network and place where the biggest DeFi projects work now, stands at approximately USD22 on 17 March 2021 (link). On the other hand, Cardano transaction costs stand at around USD0.20 on the same day (link). Hence, it is up to the client to select whichever blockchain platform they find the most suitable for their needs, with costs varying accordingly.
At the same time, the costs of outsourcing KYC services for traditional finance are declining significantly over time with the development of more new startups in this area. The pricing of such startups, while as low as USD0.46 per transaction (link), means that the records will not be decentralized.
Here, it should be noted that if a client wishes for their records to be stored in a private blockchain, such transactions don't have a cost. At the same time, they are no longer decentralized.
An electronic signature, or e-signature, refers to data in electronic form and which is used by the signatory to sign. This type of signature provides the same legal standing as a handwritten signature as long as it adheres to the requirements of the specific regulation under which it was created.
The European Union eIDAS Regulation defines three levels of electronic signature: 'simple' electronic signature, advanced electronic signature, and qualified electronic signature. The requirements of each level are built on the requirements of the level below it, such that a qualified electronic signature meets the most requirements and a 'simple' electronic signature the least.
'Simple' Electronic Signatures
An electronic signature is defined as "data in electronic form which is attached to or logically associated with other data in electronic form and which is used by the signatory to sign" (eIDAS Article 3) . Thus, something as simple as writing your name under an e-mail might constitute an electronic signature.
Advanced Electronic Signatures (AdES)
An advanced electronic signature (eIDAS Article 3) is an electronic signature which is additionally:
- uniquely linked to and capable of identifying the signatory;
- created in a way that allows the signatory to retain control;
- linked to the document in a way that any subsequent change of the data is detectable.
- Created by a qualified signature creation device
- Is based on a qualified certificate for electronic signatures.
- Contracts (sales, employment, lease, insurance, etc.)
- Transactions (e-commerce, online banking, etc.)
- Administrative procedures (tax declarations, requests for birth certificates, etc.)
What do you need to do nowadays to get a Qualified Electronic signature? You need to:
- Leave a request
- The certifying center will issue an invoice for payment.
- Collect documents
- Prepare documents for signature issuing. Transfer them to the certification center - bring them to the office.
- Wait for a response from the certification authority
- Within 1-2 days, the certification center will check your application for signature. When it is approved, the certification center will inform you by phone or mail.
- Get the signature (finally)
- Visit the office of the certification center with the originals of the documents - the certification center will verify the identity before issuing the signature. Receive your keys.
As we urge you to give us a credit of trust, we think it is important to share our beliefs to align around our initiative:
- We believe that many more people should have access to fruits of global human civilization and latest technologies
- We believe that global, open, electronic, and low-cost documents workflow create immense economic opportunities and more commerce across the world.
- We believe that people will increasingly trust distributed forms of documents workflow.
- We believe that an open and electronic identification can govern with high standards of compliance.
- We believe that we all have a responsibility to help advance fight fraud and money laundering
- Instead of competing, we want to go the way of collaboration and dialogue. SmrtSgn believes that tech innovation organized and carried out in communication with the financial sector, including regulators and experts across a variety of industries, is the only way to ensure that a sustainable, secure, and trusted framework becomes a solid foundation of our project.