UK Banking Pilot Aims to Streamline Compliance Using Factom Blockchain

Crypto startup Knabu is piloting bank regulatory reporting with Factom, one of the earliest enterprise blockchain companies.

Knabu is best known as a payments company with a smart-deposit product meant to help companies mitigate the risks of self-custodying assets on a blockchain.

It is simultaneously applying for a UK banking license, aiming to establish itself as a bank that can serve crypto and blockchain firms normally excluded from traditional banking services.

Knabu will run know-your-customer, know-your-business and anti-money laundering checks on customers, encrypt the data, and send it to Factom to be recorded on the ethereum and bitcoin blockchains.

The only customer pilot participant that Knabu would name is crypto trading platform EthBits.

IdentityMind will perform Knabu's KYC and KYB checks while DMG Blockchain will use blockchain forensic tools like Blackseer and Walletscore to perform AML due diligence on customer bitcoin and ethereum wallets.

The Factom blockchain builds data chains and then preserves them on the ethereum and bitcoin blockchains using a Merkle root.

Factom's service, which in the past was operated by customers using factoid tokens, is being run entirely by Factom with Knabu pushing data to the firm using an application programming interface.

Knabu CEO Patrick says the pilot is in line with work from the UK's Financial Conduct Authority exploring ways in which financial institutions can digitize regulatory reporting.

In the future, Knabu aims to also test reporting capital reserves on Factom's blockchain.