Unhosted Wallet KYCTM
Reduce Crypto Regulatory Risk
Get the only solution proving ownership of unhosted wallets and providing KYC data on unhosted wallet owners.
What is an Unhosted Wallet?
Understand the control, privacy, and security offered by unhosted wallets.
An unhosted, or “non-custodial,” wallet, is one where an individual user controls its private keys, rather than an exchange or trading platform. This gives users full control of their own funds, rather than requiring permission from a third party. (Examples include MetaMask and WalletConnect, or hardware wallets like Ledger and Trezor.)
- Decrypt, June 20th, 2022An unhosted wallet is not hosted by a third-party financial system. It can be very difficult or impossible to determine who is accessing or in control of the use of cryptocurrencies in an unhosted wallet. Unhosted wallets allow for anonymity and concealment of illicit financial activity.
- US Department of Treasury, December 18th, 2020.The regulations regarding Unhosted Wallets
Regulators worldwide are tightening oversight on unhosted (self‑custodial) wallets. Crypto businesses are increasingly required to identify both the sender and the receiver when funds move between hosted and unhosted addresses. The goal is to reduce anonymity in high‑risk transfers and close anti‑money laundering (AML) gaps around regulated platforms.
What regulators expect
Originator identity
Name and wallet or account must be captured and tied to each transfer.
Beneficiary details
Beneficiary name and receiving wallet details must travel with the payment.
AML & traceability
Data must be accessible for sanctions screening, fraud detection, and AML investigations.
The EU is leading the way in this regulation, which will likely be followed by codification in the US, UK, Japan and more. The EU Parliament voted earlier in 2022 to require crypto businesses to collect user data on transactions over 1000 euros involving unhosted cryptocurrency wallets. Article 14 of the recent EU legislation specifies the following:
Information on the Originator
What you must collect about the sender:
Originator's full name.
Account or wallet number used to send the funds.
One identifier: address, official ID, customer ID, or date and place of birth.
Information on the Beneficiary
What must travel with the receiving side:
Beneficiary's full name.
Account or wallet number used to receive the funds (where available).
Blockpass has the only solution available in the market for proving ownership of unhosted wallets and providing KYC data on the owners of unhosted wallets.
Learn About Unhosted Wallet KYCTM
Powered by Blockpass
What is the Unhosted Wallet KYC™ product?
A dedicated Blockpass solution that lets crypto businesses check whether an unhosted wallet is verified and, where appropriate, request the associated KYC data — keeping self-custodial flows compliant without creating friction for users.
What organizations need this solution?
Any crypto business or organization providing crypto services can benefit from Unhosted Wallet KYC™ — especially those that need to demonstrate compliance around unhosted wallets.
Virtual Asset Service Providers (VASPs), as defined by the FATF terms
Crypto-asset service providers, as defined by the EU terms
How does Unhosted Wallet KYC™ work?
1
Crypto business sets up a Blockpass account and adds the Blockpass KYC Button to their website.
2
If not already compliant, users complete KYC for their unhosted wallet on Blockpass and verify ownership via a digital signature from their crypto address.
3
Blockpass verifies the signature of the crypto address and the user’s KYC data.
4
The relevent crypto business checks the KYC result and crypto address status with Blockpass.
5
The transaction can then be completed in a compliant way.
Get started with Unhosted Wallet KYC™
The workflow is designed to be straightforward for both your team and your users so that transactions with unhosted wallets remain compliant.