Mystiko.Network is an autonomous, decentralized, and permissionless code protocol. Though Mystiko.Network’s code is self-executing, it is designed to comply with regulations against malicious and illegal activities for a healthy financial privacy environment in Web3.
Although the private transaction features of blockchain technology allow people to fully enjoy their fundamental rights to privacy, abusing those privacy features for malicious activities could bring harm to societies and these risks should be controlled.
Freedom does not come without compliance. Using Mystiko.Network’ should not equate to or be regarded as using it for illicit activities. Mystiko.Network users must not use it for the purpose of conducting illicit activities or assisting such activities.
In an effort to address the above issue, Mystiko.Network has deployed the following built-in compliance mechanisms/tools to fight against malicious and illegal activities for users and the community.
Blacklist mechanism based on government sanction lists, e.g. the U.S. OFAC SDN Auditable ZK transaction mechanism.
Regulators across the globe have been actively monitoring crypto addresses with potential illegal activities or risks. For example, the Office of Foreign Assets Control in the U.S. has a sanction list of crypto addresses. In Mystiko.Network’s design, a blacklist mechanism powered by oracle smart contracts by Chainalysis, is enabled in the original user deposit smart contracts, where a blacklist of crypto addresses can be collected by decentralized and permissionless users from various regulators like the Office of Foreign Assets Control. Crypto addresses on the blacklist will not be able to use Mystiko.Network.
Mystiko designed the first decentralized auditing system for onchain private transactions. In Mystiko’s decentralized auditing system, a decentralized auditing committee, consisting of reputable institutes and entities chosen by the community, will be established and the committee will support auditing the transaction flow of suspicious deposits from bad actors while protecting the privacy of regular users.
The 1st round of Mystiko.Network smart contract audit has been completed by ABDK Consulting, and the final audit report will be released once ready.
As a continuing effort towards compliant privacy, Mystiko DAO is constantly accepting more compliance tool suggestions. Please join the #compliance-talk channel in Mystiko discord for more discussions.