KYB

The regulatory due diligence process used to verify the legal existence, operating status, and ownership structure of a corporate client or merchant counterparty. It requires identifying the entity's Ultimate Beneficial Owners (UBOs) and unpacking complex holding structures to ensure no sanctioned or illicit actors control the business.

Operational Note

In digital-asset infrastructure, KYB is often automated via API to pull real-time data from global corporate registries, allowing for immediate verification of institutional counterparties during onboarding. For 24/7 settlement networks, this process must be continuous rather than static; smart contracts or access tokens may automatically revoke a participant's permissions if their entity status changes (e.g., dissolution or new sanctions exposure). This is critical for stablecoin issuers and B2B exchange services where the "customer" is a legal entity rather than an individual.

Scope Boundary

KYB establishes the legitimacy of the corporate entity itself but does not replace the requirement to perform individual identity verification (KYC) on the specific authorised signatories or beneficial owners behind that entity.