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I can see security tokens solutions like PolyMath keep the whitelist on the contract and allow transfer only after checking the sender and the receiver are on the whitelist.

What I'm not clear about is the process of clearing the address.

From what I gather, the issuer will conduct KYC\AML + REG D for the user and then

  1. If the user has his own wallet, how can we make sure the wallet is really his before we whitelist it?
  2. 2.How long does the address remain whitelisted. Is there an expiration?

Thanks

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    Once the KYC is complete, there is no such thing as "user". Or if you will, the user IS the wallet, you don't need to "make sure the wallet is really his". Other than that, your question is too broad. There are no standards for things like "How long does the address is whitelist for". – goodvibration Jun 3 at 10:19
  • Thanks, What if the user owning that address status was changed and he is no longer an accredited investor. i need to update my whitelist, dont i ? – Lior Gal Jun 3 at 10:40
  • What you are describing is the case of a "good person" completing the KYC, then giving his/her credentials (private key / public address) to a "bad user". As far as you - the service provider - care, there is no issue here. The regulation process has been conducted according to the requirements of the monetary authorities, and there's nothing much that you can do about it any way. – goodvibration Jun 3 at 14:21
  • If the authoriy (FBI for example) later discovers that a "bad user" owns this wallet, then they can order you to freeze it (i.e., remove it from the white-list). For this reason, you need to make sure that you support this capability in your contract (permitted for you only, of course). – goodvibration Jun 3 at 14:22
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  1. If the user have his own wallet how can we make sure the wallet is really his before we whitelist it?

The address to whitelist is part of the information supplied by the user applying. Think, "I am Alice and the address I will use will be 0x123..."

  1. How long does the address is whitelist for is there an expiration? thanks.

This is policy on a case-by-case basis.

Hope it helps.

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