Question about KYC/AML after ICO/STO

suggestionengine

After an ICO/STO has happened on Stellar and the KYC + AML information has been collected so only verified investors can invest, if the initial investors want to then sell it on the DEX, does that new buyer need to verify as well? If so, who approves their verification?

Thanks

Unsinkamoto

In practice - If your asset requires trust auth (auth_required) then YOU will need an interface where people can provide KYC info for you to verify and then create the trustline. I'd take a look at Stronghold. There are many services that offer KYC verification, and then you could just issue the trustline.

In practicality - most STOs only need the ICO to be subject to accredited investors, not asset ownership. But that may depend on where the issuer is located and under what country's laws to which the ICO and asset are subject.

suggestionengine

Ok thanks for the reply. What if it is someone else token, that I want to buy? So the accredited investors who get to buy into the actual STO have verified themselves for the STO and are selling the token and so it appears on StellarX. Would the STO issuer (from what you have said) be the ones providing the verification service that I would need to use before I am able to buy it?

Does this mean that the various DEXs of various kinds for stellar, such as StellaX, would have to provide a URL to a STO ID verification site provided by the STO issuer so that users of StellarX can buy the asset?

Unsinkamoto

It depends. For example, stronghold USD requires Auth to trade on StellarX. https://www.stellarx.com/markets/USD:GBSTRUSD7IRX73RQZBL3RQUH6KS3O4NYFY3QCALDLZD77XMZOPWAVTUK

The website link provided is from the asset's verified stellar.toml web address. Most issuers use a third party KYC service.

If the asset is not auth_required, then it is freely tradable via the SDEx. The issuer may have performed the ICO/STO using a closed, KYC compliant method other than SDEx.