> For the complete documentation index, see [llms.txt](https://docs.fairway.global/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.fairway.global/developers/build-on-cardano/merkle-compliance-utxo.md).

# Merkle Compliance UTXO

## Introduction

Fairway provides a compliance layer for **Cardano DeFi** using a **Merkle-root UTXO**.

Instead of minting identity tokens, all eligible addresses + claims are committed into a Merkle tree.

The **Compliance UTXO** anchors this state with:

* `merkle_root` → commitment to all compliant users
* `kyc_verified_at` → timestamp of last KYC check
* `sanctions_epoch` → counter for sanctions/risk updates
* `midnight_ref` → link to Midnight proof UTXO
* `fairway_sig` → Fairway’s signature over the state