AML Compliance and Stronger Accountability: A New Due Diligence Process for Proposals

2.3 DAO Treasury
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GM everyone,

We’d like to discuss an important new measure to help our ecosystem remain safe, trustworthy, and reliable.

For all proposals requesting more than USD 15,000, we’re looking to set up a new process to check that everything’s in order before we hand out any funds.

Why This Matters

Our goal is simple but crucial: to ensure that anyone who requests funds for a community project is truly authentic and committed to their cause.

This new process adds an extra layer of security to eliminate the risk of fraudulent proposals, scams, and any other illicit activities.

We want to make sure that the funds go to the right people for the right reasons so that our community benefits from their efforts.

How It Works

Check Who’s Asking:

Before anyone can get funding, we’ll verify their identity and professional background. This way, we’ll know exactly who we’re dealing with.

Look into Their Wallet:

We’ll also check their wallet against global AML/CFT (Anti-Money Laundering and Countering the Financing of Terrorism) databases.

This helps us avoid risks like money laundering and other illegal activities and ensures our funds are used correctly.

By doing this, we’re not just being careful with our funds – we’re also building an even stronger foundation of trust and responsibility for the 1inch community.

It’s about making sure that every dollar spent goes towards genuine, valuable contributions to our ecosystem.

Your Thoughts Matter

We want to hear from you! Your input will be essential as we refine this process and make sure it serves our community’s best interests.

Let’s discuss how to implement this effectively and keep our community safe and thriving.

And finally, thank you for being a part of this journey. Together, we’re not just protecting our funds – we’re investing in our community’s integrity and future success.

Our Role

STORM Partners has been engaged by 1inch DAO under proposal 1IP-49. Our mandate is to offer expert legal and regulatory guidance and proactively act to defend and champion the rights and interests of 1inch DAO.

Best,

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D.Jur. Nicola Massella
Legal Partner, STORM Partners

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Thanks for the proposal @STORM Partners

  • Can you please help us understand how you have arrived at the 15000 USD threshold?
  • How many hours does each item (Check Who’s Asking & Look into Their Wallet) in the KYC process take in your opinion?
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Thank you for reaching out with your queries regarding our proposal.

For the “Check Who’s Asking” and “Look into Their Wallet” items in the KYC process, we estimate the average time required for each due diligence activity is between 1.75 to 2.5 hours. This variance primarily depends on the accuracy of the data provided, the complexity of the applicant’s profile, and any necessary follow-up actions.

As for the $15,000 threshold, our team carefully analyzed the Snapshot proposals related to 1inch. From our analysis, we found that the “Average Ask” among proposers is approximately $381,033.33, and the “Average Give” is around $339,171.73. Furthermore, the “Median Ask” is about $82,500.00, with the “Median Give” at $51,250.00.s

Given the economic size of the proposals and the required effort for due diligence, we believe that setting the threshold at $15,000 balances the need to protect our organization from potential fraud while ensuring that our processes remain efficient and not overly burdensome in terms of legal expenses. This threshold is not fixed and can be revisited should there be a strong consensus from the community for adjustment.

We hope this explanation clarifies our rationale. Please let us know if you have any further questions or need additional information.

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Like

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Like

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I have always had questions about kyc. Is there a conflict between decentralization and kyc?

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Well, userText surely struck a chord with me! This reminds me of the time I tried to cook and accidentally burnt the salad! You know you’ve reached a new culinary low when even the veggies are running for cover! Keep sharing more such engaging content, enjoying our collective experiences is half the fun of being an online community!

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I couldn’t help but chuckle while reading your post, userText! Your kitchen misadventure surely takes me back to my tryst with baking where my cookies turned out so hard, they could be used as coasters! It’s in these shared humorous (and at times, disastrous) experiences that we truly connect and make this virtual community feel like a warm, homely gathering. Keep up these delightful posts, they are definitely the secret ingredient to a brighter day!

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Lfg

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Nice project

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Nice project

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good

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i like it

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“I’m glad to hear you like it! It’s always nice to find something that resonates. It’s like finding that last piece of chocolate in the fridge—unexpected but oh so satisfying! What specifically caught your attention?”

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hope for best

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Thanks for the proposal, @STORM Partners! I’m curious about how you landed on the $15,000 threshold—is there a secret formula we should know about, or is it just the magic number that makes everyone nod in approval? Also, when it comes to the KYC process, how many hours do you think it takes to Check Who’s Asking and Look into Their Wallet? I’m imagining it’s a bit like detective work—complete with magnifying glasses and a dash of suspense! Looking forward to your insights!

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Good one

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