“Easiest way to do KYC checks”

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Research by APathNotTaken

What is ICO Pass?

ICO Pass is a suite of tools designed to gather, verify and exchange know-your-customer (KYC) information. The main goal for ICO Pass is to simplify the KYC verification process for ICO organizers. While this sounds like it could be a simple task, the reality is it is much more complicated. Most ICO organisers experience the following issues:

  • Gathering and verifying contributors can be a very time-consuming process
  • The organizer may still find it difficult to get in contact with a verified client
  • Banks and regulatory bodies cannot contact clients. Despite the decentralised nature of blockchain, ICO organizers will eventually have to acquiesce to regulatory demands.
  • KYC management systems cannot interact with blockchain-based data
  • Each ICO organizer will use different smart contracts to manage their crowd sale.
  • Crowd-sale contracts are audited and may be difficult to change

So, within 7 minutes and for €7, ICO Pass will:

  • Verify authenticity of a person’s identification documents
  • Face-matching
  • Verify the individual against
    • Sanctions database
    • Country of origin
    • Residency

Once this process is complete, ICO Pass will then write this information to the blockchain. The identity owner has the choice as to who they want to share this information with. The organizer will be able to get in contact with the contributor either for their own purpose or on behalf of a regulatory body or other entity and, because ICO Pass control the process, each ICO will be using the same auditable smart contract.

While ICO Pass will initially focus on Token Sale organizers who are looking to complete KYC checks, the objective will be to offer their service to exchanges, banks, governments and regulatory bodies.

The ICO Market

The word ICO is used as synonymously as bitcoin and cryptocurrency when making reference to blockchain. The purpose of an ICO is to raise capital for a blockchain project. Unlike an IPO, there isn’t an issue of shares or securities. However, the issued token can be structured in a way that resembles a share or a bond by offering returns from the project, give the possibility of redemption after a period of time and even voting rights. While there are many benefits of a decentralised system, the regulatory and legal framework is unclear. This presents risks to both the project and the individual. The main concerns are:

  • Theft of individual and project funds
  • Cybersecurity
  • Identity theft
  • No legal protection
  • No regulatory protection

Regulation will represent a positive step forward in the blockchain market. It is encouraging that the SEC acknowledges “the technology on which cryptocurrencies and ICOs are based may prove to be disruptive, transformative and efficiency-enhancing” and that they are “confident that developments in fintech will help facilitate capital formation and provide promising investment opportunities for institutional and main street investors alike.” However, until the regulation is in place, society will not be able to enjoy the full benefits of the blockchain technology.

Statement from the SEC concerning ICO’s: https://www.sec.gov/news/public-statement/statement-clayton-2017-12-11

Why ICOPass?

ICO Pass is a subsidiary of Notakey. In 2015 the European Parliament adopted the revised Directive on Payment Services. This meant that financial companies had to adopt two-factor authentication for bank login and transaction approval. The Notakey team had already developed the Latvian State ID architecture and e-signature software. So, when these new regulations were implemented, the team decided to develop software that met these regulatory requirements while also solving banks scalability issues. In addition to customer authentication, they also provide video identification, employee authentication, document signing and federated digital ID.

Notakey recognised the issues and potential threats during ICOs and, through their subsidiary ICO Pass, they have utilised their existing software and experience of working with government and regulatory bodies, to provide KYC verification services.

Notakey has also developed partnerships with some very notable organisations including Swisscom, UBS, Credit Suisse, Pauls Stradins Clinical University and Santa Monica Networks. The team also won kickstart accelerator and have endorsements from the European Commission. They also received funding from the Horizon 2020, European Union funding for Research & Innovation.

ICO Pass are perfectly positioned to succeed in this market. They not only have the experience of developing solutions for government and regulatory bodies but also possess an enviable list of partners, through notakey.

Competition

There are a number of other projects which provide identification and KYC services. I will provide a few of the better-known projects below along with a brief description of how ICOPass differs.

Civic v ICO Pass

Civic focused on identification while ICO Pass focused on KYC verification. Most of the things promised by CIVIC are delivered by ICO Pass as well. However, because each project has a different focus, for the purpose of KYC checks, ICO Pass delivers a faster, more efficient, KYC verification process than CIVIC. ICO Pass have also linked an individual’s identity to their wallet. Thus, if a person sends funds from an unverified wallet, the funds are returned. Through the development of an app, ICO Pass have transferred the cost of KYC from the ICO organiser to the contributor. This is something CIVIC haven’t been able to achieve.

CIVIC raised significantly more funds than ICO Pass are raising. CIVIC mcap is USD 90,000,000 (as at 25th March 2018) having peaked at $480,000,000. ICO Pass are raising EUR 5,000,000.

Here is a review by MrBlueberry: https://medium.com/@mrblueberry/civic-cvc-versus-ico-pass-icop-b570bb0e7909

Selfkey v ICO Pass

There are two distinguishing features that differentiate ICO Pass from Selfkey:

  • Market strategy
  • Product readiness

Market Strategy – ICO Pass are focusing on ICOs initially which means that their software meets these requirements perfectly. ICO Pass uses professional third parties to verify the identification documents, face-match against ID, and complete a sanctions check. My understanding is that Selfkey relies on the individual choosing the partners who they want to verify them for the KYC process. This makes the process more time consuming relative to the automated process provided by ICO Pass.

Selkey are only writing the results to the blockchain. ICO Pass also utilise their own smart contracts to check that funds are coming from a verified wallet. If the wallet isn’t verified, funds will be returned.

ICO Pass also transfer the cost of KYC checks to the contributor. Selfkey won’t be able to do this. For ICO organisers, KYC verification can be quite an expensive process without ICO Pass.

ICO Pass will utilise an app, thereby making the process quite simple. The user can utilise their smartphone camera to take pictures and upload to their app seamlessly. Selfkey doesn’t have an app and will rely on a desktop computer which will be cumbersome.

Once ICO Pass has succeeded in creating the ICO product, they will transfer their attention to the banking industry. ICO Pass will then offer their product to government entities. Ironically, this is where the team started, having originally built the identification and e-signature software for the Latvian government.

Product Readiness – The majority of features offered by ICO Pass are already built into their product.

Selfkey raised significantly more funds than ICO Pass are raising through their ICO. Selfkey market cap is USD 18,000,000 (as at 25th March 2018) having peaked at over $70,000,000. ICO Pass are raising EUR 5,000,000.

VeriMe v ICO Pass

VeriMe seems to offer a similar product to ICO Pass. However, under the surface, they are actually quite different. VeriMe offers a product suited to retail but it won’t be as effective for the financial industry. For example, VeriMe requires a selfie and a photo of ID or a driver’s license. Unfortunately, in most countries, these documents do not provide any security signs, so it is impossible to determine whether these documents are falsified. ICO Pass solve this problem by searching different government databases to determine if such a person exists including face-matching. They then determine whether the person is on any watch lists. Finally, because VeriMe focuses on e-commerce, they don’t have additional features which take into consideration the needs of the ICO organiser. ICO Pass assist the organiser by linking a person’s identity with their wallet and automatically returning funds if the wallet hasn’t been verified. In addition, the organiser can see the status of the identity checks in a special dashboard. If there are any un-verified persons, there are many tools what the ICO organiser can use to solve this.

VeriMe are raising USD 30,000,000. ICO Pass are raising EUR 5,000,000.

The ICO Pass Process

ICOpass3

  • User downloads the ICO Pass app
  • The user provides personal details (Name, Surname, Residency, Email address etc.)
  • ICO Pass verify this information using a number of government and non-government databases and sanctions lists
  • The user takes a photo of their ID and ICO Pass verifies the ID
  • The user takes a selfie and ICO Pass face matches against their ID
  • The user transfers a small amount of ETH to the identity address provided by their app in order to link their wallet to their ID. Eth is refunded less transaction fees
  • The app will offer to link wallet address to identity. This wallet will need to be used for contributing to the ICO. There can be multiple wallets linked to their identity.
  • The user can now register for the ICO by selecting the ICO in the list provided
  • User authorises the app to send their personal information to the ICO address
  • After the approval process is complete, the app generates an encrypted package of personal information and stores the information in IPFS.
  • A link to the package is sent to the ICO organiser. The encrypted package can only be opened with the private key held by the ICO organiser.

For a full description of this process, please see the ICO Pass White Paper:

https://drive.google.com/file/d/1hs-RWInvpc_p7UpjIvUU1xNuqIvUi4Rn/view

The ICO Pass Team

The full team is provided in the link below. I will list the founders who have proven to be very knowledgeable and responsive to questions I have asked. Particularly Janis Graubins, who has been extremely helpful.

Janis Kirsteins – CEO and Founder. Janis developed the Latvian states ID card identification and e-signature solution

Gints Kirsteins – COO and Founder. Gints was project manager for the e-signature solution in Latvia.

Janis Graubins – CCO and Founder. Janis was a Business developer at London based Innovation agency unit9.

https://www.icopass.id/#team

The ICO Pass Roadmap

The full timeline is within the following link:

https://www.icopass.id/#timeline

How to Buy

ICO Pass has a total of 60,000,000 tokens available. They will be offering a total of 20,000,000 tokens in order to raise capital. They have already raised 200 ETH during a pre-sale. They will be completing their EUR 5,000,000 capital raise by holding a Dutch auction. The Dutch auction starts with a higher price which reduces over the duration of the ICO. The duration of the ICO is a maximum of 1 month or once the full EUR 5,000,000 has been raised. All participants will eventually pay the same price, which will be the lowest price paid for the last ETH raised. Thus, if all of the capital was raised on day 1, the final price would be much higher than if the ICO lasted the full month to complete. Anyone who contributes in the first hour of the auction will receive a 15% bonus. All other participants will just receive the tokens relative to the final price. The table below demonstrates how this will work.

Contributor Contribution Bonus Final price Number of ICOPs
1 $1,000 15% $1 1,150 ICOPs
2 $1,000 15% $0.5 2,300 ICOPs
3 $1,000 0% $1 1,000 ICOPs
4 $1,000 0% $0.75 1,333 ICOPs

 

Conclusion

ICO Pass will be providing a revolutionary product that meets regulatory requirements for KYC verification. Due to the focus being on ICOs, their product also takes in to consideration the needs of the ICO organiser while passing the cost to the contributor. ICOs are their near-term focus, however, their product will then be offered to the banking industry and government institutions. While other projects offer similar products, these products do not fulfil all of the functions provided by ICO Pass, nor do they possess the experience or partnerships enjoyed by the ICO Pass team. I am fortunate enough to have found this project before the pre-sale. This is one of my most exciting projects for 2018 and represents a long-term hold given the potential to expand their customer base over a relatively short space of time. I believe ICO Pass will list for multiples of the Dutch auction price.

Thanks for reading, 

APathNotTaken

I did not receive any reward or incentive to produce this document.


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