This webinar addresses current challenges related to balancing user privacy and regulatory compliance on the blockchain, exploring innovative solutions designed to overcome these limitations. This content is essential for executives, technology leaders, and cybersecurity professionals in the financial sector, offering valuable insights into the evolving blockchain application landscape.

Blockchains serve as real-time payment rails, with stablecoins enabling the settlement and transfer of large amounts of U.S. dollars, often within milliseconds. (This is a capability not currently broadly available in Canada.) A key risk in this area is balancing users’ privacy and regulators’ need for transparency to facilitate compliance and prevent criminal activity.

Amit Chaudhary, founder of Labyrinth Protocol, spoke about existing blockchain solutions, most of which offer either full transparency or complete anonymity. He cited the example of know your customer (KYC), a common compliance solution that lacks accountability and is very centralized, making it less efficient.

Labyrinth has a process called selective de-anonymization, which allows users to retain privacy and regulators to de-anonymize transactions only when there is credible evidence of wrongdoing. This is accomplished using a network of independent “revokers” and “guardians”, who ensure no single entity has complete control. Revokers can request de-anonymization based on suspicious activity, then guardians vote to approve or deny the request. Regardless of the outcome, they cannot see the transaction details, removing any conflict of interest.

Labyrinth’s selective de-anonymization is one example of how blockchain applications are revolutionizing finance, improving efficiency and unlocking a new world of customer convenience.