Proof-of-UBO

zkMe’s zkKYB suite includes comprehensive Ultimate Beneficial Ownership (UBO) verification, enabling regulated entities to comply with global AML/CFT standards while preserving the privacy of corporate officers.

What is a UBO?

An Ultimate Beneficial Owner is the natural person(s) who ultimately owns or controls a corporate entity. International anti-money laundering regulations, such as those from the Financial Action Task Force (FATF), typically define a UBO as any individual who directly or indirectly:

• Holds 25% or more of the shares or voting rights in the company.

• Exercises significant influence or control over the company and its management, regardless of ownership percentage.

Identifying and verifying UBOs is a critical component of any robust Know Your Business (KYB) process. It prevents individuals from using complex corporate structures, shell companies, or trusts to conceal illicit activities.

How UBO Verification Works in zkKYB

UBO verification is an integral part of the Document-Based eKYB path within the zkKYB process. It follows a clear, multi-step procedure after the initial corporate documents have been authenticated.

1. Ownership Structure Mapping:

   • zkMe’s system analyzes the provided corporate documents (e.g., articles of incorporation, shareholder registry, cap table) to map out the full ownership structure.

   • It identifies all individuals who meet the jurisdictional UBO threshold, tracing ownership through any intermediate legal entities.

2. Individual Identity Verification (zkKYC):

   • For each identified UBO, a standard zkKYC - Know Your Customer process is initiated.

   • The individual verifies their identity using their government-issued passport or national ID.

   • This process includes an authenticity check of the document, a liveness check, and screening against global AML, PEP, and sanctions lists.

3. UBO Compliance Credential Issuance:

   • Once all identified UBOs have successfully completed their individual zkKYC, the system can issue a UBO Compliance Credential.

   • This credential is a zero-knowledge proof that attests to the fact that all beneficial owners of the entity have been identified, verified, and have passed all necessary AML/CFT checks.

zkMe’s Role in UBO Verification

zkMe’s platform provides a seamless, privacy-preserving solution for the entire UBO workflow:

• Automated Analysis: Automates the complex task of parsing legal documents to identify the UBO structure, reducing manual effort and human error.

• Integrated zkKYC: Leverages its core zkKYC service to perform high-assurance identity verification on each UBO without requiring the business to handle its officers' personal data.

• Zero-Knowledge Attestation: The final output is not a list of names or sensitive documents. It is a single, verifiable ZKP credential confirming that UBO due diligence has been successfully completed according to regulatory standards.

Use Cases

• Regulated Financial Services: Enables crypto exchanges, lending platforms, and asset issuers to meet their legal obligation to perform UBO checks before onboarding corporate clients.

• DAO & Protocol Governance: Allows DAOs to verify the human controllers behind corporate entities participating in governance votes, ensuring transparency and preventing Sybil attacks.

• Enterprise Onboarding: Any Web3 platform that interacts with corporate clients can use zkMe’s UBO check to mitigate counterparty risk in a compliant and privacy-preserving manner.