The Office of Foreign Asset Control prohibits transactions with certain individuals and with individuals in certain countries. Fabrica and its users needs to adhere strictly to OFAC prohibitions on transactions through restricted wallet lists and ID checks.
Anti-money laundering (AML) laws are requirements of financial institutions that at a high level require controls and reporting to stop money laundering in banking. Know your customer (KYC) rules are a AML practice requiring sufficient diligence on a customer's identity.
As a non-financial institution, Fabrica is not strictly subject to the requirements of KYC/AML. However, as a financial-adjacent company in an industry subject to strict scrutiny around fraud, Fabrica has a commitment to ensuring safe and non-fraudulent transactions within its ecosystem, to the best extent possible, implementing streamlined compliance practices and partnering with best-in-class tools for best user experience.
As a consequence, Fabrica has a self-imposed KYC/AML policy that prioritizes creating a safe environment for its users.
There are three main touch points that Fabrica is interested on user identity verification: at property add, at property transfer, and at property unload.
At property add: when a user is loading a property that they own individually, identity verification can be done via the notary. While relying on a 3rd party is not ideal, Fabrica's use of the remote online notary system notarize minimizes the risk of fraud at the notary stage.
At property transfer: In some counties, transfer notifications are required on transfers not involving a recorded deed. In all counties, an owner is benefitted from being the person recognized as the beneficial owner of the trust for receipt of property tax information. Fabrica confirms the identity of the owner to provide this information. In addition, having a verified owner identity provides later buyers with the certainty that they aren't purchasing the property from a bad actor.
At property unload: Once again, the notary acts as the identity verification in the process of deeding the property out of the trust and to the owner.
In addition to the above, when an entity is the property owner adding the property to the NFT, from an abundance of caution Fabrica gathers additional identity verification and entity ownership information to prevent fraud and potentially meet finCEN requirements that may later be levied to Fabrica and its users.
While identity verification is performed in these three steps, see our title processes for how Fabrica ensures high confidence that the NFTs on chain do correspond to actual assets issued by their rightful owners or control persons.
Updated about 1 year ago