Revocation Epochs & Freshness

Fairway separates long-term KYC from short-term sanctions monitoring. KYC proofs include the time of verification; protocols enforce their own acceptance windows and checking latest sanctions epoch.

Purpose

Compliance freshness has two layers:

1. KYC Verification Timestamp → When was the user last verified?

   • Recorded once in proof metadata.

   • Protocols decide how old is “too old” (jurisdiction-specific).

2. Sanctions & Risk Epochs → Rolling counters that track dynamic changes.

   • Incremented whenever sanctions lists or risk profiles update.

   • Only addresses affected by a change are updated.

This layered approach avoids forcing users to re-KYC daily, while ensuring protocols can enforce up-to-date sanctions and AML checks.

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Why It Matters

• KYC validity → EU vs. US vs. emerging market rules differ (6 months, 1 year, etc.).

• Sanctions screening → must be near real-time (lists update daily/weekly).

• Risk monitoring → risk scores can change without invalidating full KYC.

Without this separation, you’d either:

• Burden users with unnecessary re-checks, or

• Accept stale compliance states.

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How It Works

Cardano (Merkle UTXO)

The Compliance UTXO datum includes:

{
  "merkle_root": "0xabc123...",
  "kyc_verified_at": "2025-03-15T10:00:00Z",
  "sanctions_epoch": 452,
  "risk_profile_score": 17,
  "midnight_ref": "0xdeadbeef#0",
  "fairway_sig": "sig(...)"
}

• kyc_verified_at = fixed timestamp of when KYC was performed.

• sanctions_epoch = current counter (increments on list/risk changes).

• risk_profile_score = optional numeric risk measure (low=0, high=100).

---

EVM (EAS Attestation)

EAS attestations include the same fields:

{
  "subject": "0xUserWallet",
  "policyId": "POOL-A.KYCv2.EU",
  "kyc_verified_at": "2025-03-15T10:00:00Z",
  "sanctions_epoch": 452,
  "risk_profile_score": 17,
  "commitmentRoot": "0xabc123...",
  "epoch": 452
}

• Protocols pass expectedEpochRoot into the PolicyEngine for freshness.

• Off-chain rules define how old a kyc_verified_at can be.

---

Midnight (Proof Ledger)

• ZK-proofs generated by the Cloud Agent are posted to Midnight with:

  • KYC verification timestamp

  • Current sanctions epoch

• Serves as the immutable audit trail for regulators.

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Diagram

flowchart TD
    U[User completes KYC once] --> V[Vault stores PII + timestamp]
    V --> A[Fairway Agent generates proof]
    A --> M[Midnight Ledger (proof + kyc_verified_at + sanctions_epoch)]
    M --> C[Cardano Merkle UTXO {root, timestamp, epoch, sig}]
    M --> E[EVM Attestation {policyId, timestamp, epoch}]
    S[Sanctions feed update] --> F[Cloud Agent updates sanctions_epoch and only impacted leaves]
    F --> C
    F --> E

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Enforcement Logic

1. Check KYC freshness

   • Compare kyc_verified_at against protocol’s policy.

   • Example: “only accept KYC within last 6 months.”

2. Check sanctions epoch

   • Ensure user’s proof includes the latest sanctions_epoch.

   • If out of date → reject.

3. Check risk score (optional)

   • Compare against configured thresholds.

---

Cardano (Aiken snippet)

let ok_kyc = ctx.tx.now - utxo.datum.kyc_verified_at <= rule.max_age
let ok_epoch = utxo.datum.sanctions_epoch == registry.current_epoch

EVM (Solidity snippet)

require(
  block.timestamp - kycVerifiedAt <= maxAge,
  "KYC_DENIED:STALE_KYC"
);

require(
  latestEpochRoot == expectedEpochRoot,
  "KYC_DENIED:STALE_SANCTIONS"
);

---

Benefits

• Jurisdiction-aware → protocols choose their own KYC freshness policy.

• User-friendly → users don’t re-KYC for every sanctions update.

• Efficient → only affected addresses updated when sanctions lists change.

• Audit-ready → Midnight provides historical proof trail.

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Compliance Alignment

• FATF Recommendation 10 (ongoing due diligence) → sanctions epoch updates.

• AML Directives → periodic KYC refresh enforced per institution.

• GDPR → only timestamps & hashed commitments on-chain.

• Regulatory audits → auditors can query kyc_verified_at + epoch state at time of tx.

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Next Steps

• See Build on Cardano → validator checks timestamps + epoch.

• See Build on EVM → attestation freshness.

• Review Trust Registries → how issuer keys evolve with epochs.