Fintech

The blockchain would like to see your ID

How do you prove you’re legit without disclosing personal information? The crypto industry is trying to solve that problem while complying with know-your-customer rules.

Circle CEO Jeremy Allaire

Circle CEO Jeremy Allaire said the Verite project intends to “use cryptographic proofs of an identity without disclosing the identity information itself.”

Photo: Circle

Call it KYC, crypto-style.

A group of major crypto companies, led by Circle and Coinbase, introduced a digital identity protocol Thursday designed for blockchains, which would comply with “know-your-customer” requirements in traditional finance while giving users control over their personal information.

The system, called Verite, is “designed to enable individuals to have self-sovereign control over their identity” while offering “very strong KYC assurances,” Circle CEO Jeremy Allaire told Protocol. “You can think of it like an identity token in their wallet” which can be used to “interact with these networks.”

Verite underlines the crypto industry’s heightened focus on following established financial services regulations.

The rollout comes a day after another group of crypto companies, also including Coinbase and Circle, said they are building a system called TRUST which would enable its members to comply with the Treasury Department’s Travel Rule, which requires information about big financial transactions to “travel” with the movement of funds.

“TRUST is solving a much narrower problem,” Allaire said. Verite is “something that can be used in any kind of application. It could be used for proving your identity to an NFT market, proving a possession and ownership of an entity. It can be used to prove accredited investor status to a DeFi protocol. It's a very generalized technology.”

The proposal also comes alongside growing concern about centralized identity pools in financial and government transactions. The IRS recently backed off a plan to use facial recognition for authenticating users. And critics have pointed out that systems that accumulate personal financial data are attractive to hackers.

Allaire said the Verite project intends to “use cryptographic proofs of an identity without disclosing the identity information itself.”

“What we want is a world where I, as an individual, can exchange value with another individual or with a business or a merchant or whatnot, and prove to that counterparty that I'm actually who I say I am — that I'm a legitimate individual that's in good standing and has been KYC’d,” he said. “But I don't necessarily want to give them my personal identifiable information.”

To illustrate, Allaire cited the example of the way a bartender could check if a person, say Allaire’s daughter, is of legal drinking age.

“If my daughter walks into a bar, and says, ‘I'd like a drink,’ why does my daughter have to give them her name and address in order to get a drink because you do have to show your ID?” he said. “Why can't I scan a QR code and cryptographically prove that I, in fact, am 21 years old?”

Centre, an independent consortium founded by Circle and Coinbase which came up with the open-source framework for the USDC stablecoin, is supporting the development of Verite. Along with Block, Circle and Coinbase are collaborating on Verite “to promote broader adoption of crypto payments and decentralized finance,” Centre said in a statement. New products and services based on the technology are expected to be released later this year, Allaire said.

Workplace

What the economic downturn means for pay packages

The war for talent rages on, but dynamics are shifting back to the employers.

Compensation packages could start to look different as companies reshuffle the balance of cash and equity.

Illustration: Nuthawut Somsuk/Getty Images

The market is turning. Tech stocks are slumping — which is bad news for employees — and even industry powerhouses are slowing hiring and laying people off. Tech talent is still in high demand, but compensation packages could start to look different as companies recruit.

“It’s a little bit like whiplash,” compensation consultant Ashish Raina said of the downturn. Raina, who mainly works with startups that have 200 to 800 employees, previously worked as the director of Talent at Index Ventures and head of Compensation and Talent Analytics at Box. “I do think there’s going to be an interesting reckoning in terms of pay increases going forward, how that pay is delivered.”

Keep Reading Show less
Allison Levitsky
Allison Levitsky is a reporter at Protocol covering workplace issues in tech. She previously covered big tech companies and the tech workforce for the Silicon Valley Business Journal. Allison grew up in the Bay Area and graduated from UC Berkeley.
Sponsored Content

Why the digital transformation of industries is creating a more sustainable future

Qualcomm’s chief sustainability officer Angela Baker on how companies can view going “digital” as a way not only toward growth, as laid out in a recent report, but also toward establishing and meeting environmental, social and governance goals.

Three letters dominate business practice at present: ESG, or environmental, social and governance goals. The number of mentions of the environment in financial earnings has doubled in the last five years, according to GlobalData: 600,000 companies mentioned the term in their annual or quarterly results last year.

But meeting those ESG goals can be a challenge — one that businesses can’t and shouldn’t take lightly. Ahead of an exclusive fireside chat at Davos, Angela Baker, chief sustainability officer at Qualcomm, sat down with Protocol to speak about how best to achieve those targets and how Qualcomm thinks about its own sustainability strategy, net zero commitment, other ESG targets and more.

Keep Reading Show less
Chris Stokel-Walker

Chris Stokel-Walker is a freelance technology and culture journalist and author of "YouTubers: How YouTube Shook Up TV and Created a New Generation of Stars." His work has been published in The New York Times, The Guardian and Wired.

Policy

How 'Zuck Bucks' saved the 2020 election — and fueled the Big Lie

The true story of how Mark Zuckerberg and Priscilla Chan’s $419 million donation became the 2020 election’s most enduring conspiracy theory.

Mark Zuckerberg is smack in the center of one of the 2020 election’s multitudinous conspiracies.

Illustration: Mike McQuade; Photos: Getty Images

If Mark Zuckerberg could have imagined the worst possible outcome of his decision to insert himself into the 2020 election, it might have looked something like the scene that unfolded inside Mar-a-Lago on a steamy evening in early April.

There in a gilded ballroom-turned-theater, MAGA world icons including Kellyanne Conway, Corey Lewandowski, Hope Hicks and former president Donald Trump himself were gathered for the premiere of “Rigged: The Zuckerberg Funded Plot to Defeat Donald Trump.”

Keep Reading Show less
Issie Lapowsky

Issie Lapowsky ( @issielapowsky) is Protocol's chief correspondent, covering the intersection of technology, politics, and national affairs. She also oversees Protocol's fellowship program. Previously, she was a senior writer at Wired, where she covered the 2016 election and the Facebook beat in its aftermath. Prior to that, Issie worked as a staff writer for Inc. magazine, writing about small business and entrepreneurship. She has also worked as an on-air contributor for CBS News and taught a graduate-level course at New York University's Center for Publishing on how tech giants have affected publishing.

Fintech

From frenzy to fear: Trading apps grapple with anxious investors

After riding the stock-trading wave last year, trading apps like Robinhood have disenchanted customers and jittery investors.

Retail stock trading is still an attractive business, as shown by the news that crypto exchange FTX is dipping its toes in the market by letting some U.S. customers trade stocks.

Photo: Lam Yik/Bloomberg via Getty Images

For a brief moment, last year’s GameStop craze made buying and selling stocks cool, even exciting, for a new generation of young investors. Now, that frenzy has turned to fear.

Robinhood CEO Vlad Tenev pointed to “a challenging macro environment” marked by rising prices and interest rates and a slumping market in a call with analysts explaining his company’s lackluster results. The downturn, he said, was something “most of our customers have never experienced in their lifetimes.”

Keep Reading Show less
Benjamin Pimentel

Benjamin Pimentel ( @benpimentel) covers crypto and fintech from San Francisco. He has reported on many of the biggest tech stories over the past 20 years for the San Francisco Chronicle, Dow Jones MarketWatch and Business Insider, from the dot-com crash, the rise of cloud computing, social networking and AI to the impact of the Great Recession and the COVID crisis on Silicon Valley and beyond. He can be reached at bpimentel@protocol.com or via Google Voice at (925) 307-9342.

Enterprise

Broadcom is reportedly in talks to acquire VMware

It hasn't been long since it left the ownership of Dell Technologies.

Photo: Yichuan Cao/NurPhoto via Getty Images

Broadcom is said to be in discussions with VMware to buy the cloud computing company for as much as $50 billion.

Keep Reading Show less
Jamie Condliffe

Jamie Condliffe ( @jme_c) is the executive editor at Protocol, based in London. Prior to joining Protocol in 2019, he worked on the business desk at The New York Times, where he edited the DealBook newsletter and wrote Bits, the weekly tech newsletter. He has previously worked at MIT Technology Review, Gizmodo, and New Scientist, and has held lectureships at the University of Oxford and Imperial College London. He also holds a doctorate in engineering from the University of Oxford.

Latest Stories
Bulletins