Blockchain for Decentralized Know Your Customer (KYC) and Customer Due Diligence (CDD) Pipelines in the Metaverse
Valerie Huiying Tan, Wei Yang Bryan Lim, Zehui Xiong, Dusit Tao Niyato · 2023
Transactions conducted in the Metaverse must be validated in an interoperable and decentralized manner in order to prevent money laundering risks. Some processes to ensure that transactions are legal include the Know Your Customer (KYC) and Customer Due Diligence (CDD) processes. However, there are many problems that currently exist with traditionalKYC and CDD pipelines that include lengthy and repetitive processes, as well as the bundling problem that compromises the privacy of customers’ information. As more transactions happen in the Metaverse domain, these problems can be exacerbated. In this paper, we present a system using permissioned blockchain technology, which makes use of public and private smart contracts to efficiently validate the legitimacy of transactions executed in the Metaverse.