Compliance

KeyStone enforces compliance at settlement time. Compliance is the only step that requires KeyStone’s off-chain involvement - everything after compliance is handled autonomously by the contracts.

Three-layer architecture

1. Off-chain screening

KeyStone’s compliance oracle screens parties via external APIs: LSEG World-Check - Entity-level screening against 100M+ records across 240+ countries:

Sanctions lists (OFAC, EU, UN, HMT)
Politically Exposed Persons (PEPs)
Adverse media
Enforcement actions

CipherOwl - Wallet-level risk scoring across 50+ blockchains:

Sanctions exposure
Mixer/tumbler interaction
Fraud and scam associations
Protocol risk attribution

2. On-chain attestation

After screening, the Pass result is attested to the ComplianceRegistry smart contract via an M-of-N bundle of independent EIP-712 attester signatures:

attest(Attestation{settlementId, partyHash, status, referenceHash, deadline}, signatures[])

The contract recovers each signer and requires a threshold of distinct attesters before recording the attestation - the submitter is not trusted, the signatures authorize. No personal data is stored on-chain: only the hashed party identifier, the status, and a hashed reference.

3. Contract-enforced gate

The KeystoneSettlement contract checks areAllPartiesCleared(settlementId, partyHashes) on the ComplianceRegistry before executing - every party hash bound at registration must be attested Pass. No one can skip compliance: the contract enforces it at the moment funds move.

How it works in a settlement

Manual compliance decisions

When a party is flagged, a compliance officer reviews the screening details in the KeyStone Dashboard and submits a decision. Decisions can also be submitted via the API:

curl -X POST https://api.keystoneos.xyz/v1/settlements/$ID/compliance-decision \
  -H "Authorization: Bearer $TOKEN" \
  -d '{"decision": "approve"}'

const settlement = await client.compliance.approve("550e8400-...");
// Or to reject:
// const settlement = await client.compliance.reject("550e8400-...");

settlement = await client.compliance.approve("550e8400-...")
# Or to reject:
# settlement = await client.compliance.reject("550e8400-...")

Decisions are:

approve - Override the flag, allow the settlement to proceed
reject - End the settlement: it transitions to REJECTED (nothing was deposited yet)

Both decisions are recorded in the settlement’s event history with full audit context.

Compliance data on the API

Each party’s compliance check is exposed on the settlement resource with:

status - PASS, FLAGGED, or FAIL per screening
chain_attested_at - when the on-chain M-of-N attestation landed in the ComplianceRegistry (null until it does). Use this to distinguish “screened off-chain” from “attested on-chain and able to execute”.

Admin views additionally expose principal_id, linking the check to the screened principal’s full audit trail.

Open attestation interface

KeyStone operates the default compliance oracle, but the attestation interface is open:

M-of-N attesters: A Pass is recorded only when a threshold of distinct, independent attesters each sign the same attestation - no single key can forge a Pass. The attester set and threshold are fixed at the registry’s deployment.
Platform-operated oracles: Platforms can run their own compliance screening; on-chain enforcement is the standardized threshold gate
Verifiable: All attestations are permanent on-chain records - a false attestation is provable liability

This design separates screening (off-chain, provider-specific) from enforcement (on-chain, standardized gate check).

What KeyStone stores

KeyStone never stores raw KYC/AML data. We store only compliance status (pass/fail/flagged) and a reference ID pointing to the compliance provider’s record.

Layer	What is stored
Off-chain (KeyStone DB)	Compliance status + reference ID pointing to provider’s record
On-chain (ComplianceRegistry)	Hashed party identifier + status enum + hashed reference ID

The compliance provider (LSEG, CipherOwl) remains the source of truth for the actual screening data. KeyStone only records the outcome.

Screening performance

Metric	Value
Average screening time	2-4 seconds
Auto-pass rate	~95%
Supported jurisdictions	240+ countries
Re-screening	Every settlement - screening results are never cached (a daily per-platform cache holds LSEG case-template and resolution metadata only)

See ComplianceRegistry for full contract documentation.

Getting Started

Core Concepts

Guides

Smart Contracts

Three-layer architecture

1. Off-chain screening

2. On-chain attestation

3. Contract-enforced gate

How it works in a settlement

Manual compliance decisions

Compliance data on the API

Open attestation interface

What KeyStone stores

Screening performance

​Three-layer architecture

​1. Off-chain screening

​2. On-chain attestation

​3. Contract-enforced gate

​How it works in a settlement

​Manual compliance decisions

​Compliance data on the API

​Open attestation interface

​What KeyStone stores

​Screening performance

Three-layer architecture

1. Off-chain screening

2. On-chain attestation

3. Contract-enforced gate

How it works in a settlement

Manual compliance decisions

Compliance data on the API

Open attestation interface

What KeyStone stores

Screening performance