Fractal, a Berlin and Singapore-based identification management startup, announced today it has signed a partnership with Gnosis, which has developed a conditional token standard allowing users to predict the outcome of multiple events and gain insight into their relationship.
The partnership will benefit future users of Sight, a market prediction platform by Gnosis. Fractal’s identification solution will bring bank-grade compliant Know Your Customer (KYC) and Anti-Money Laundering (AML) capabilities to Sight’s operations.
Per McKinsey’s Digital Identification 2018 report, there are an estimated 4.4 billion people around the world who either do not have a legally recognized form of identification (ID) or do not have a digital trail.
Julian Leitloff, CEO/founder of Fractal, came up with the idea for the business after witnessing the 2008 collapse of Lehman Brothers and Deutsche Bank. He saw the lack of AML/KYC control as a major barrier preventing healthier financial ecosystems. Thus, he decided to work with like-minded individuals to start Fractal to promote financial inclusion at a global level.
“For global investors to have access to global intelligence and market insights, they will need requisite digital identity and verification. Fractal’s solution helps Gnosis and Sight users to access smart investment intelligence to make better trades and investments. Increasing the compliance of blockchain-based projects worldwide, will, in turn, increase the standing of the new ecosystem with regulators. We want to offer a solution to not only giving an impulse to set a new regulatory standard, but also help blockchain companies overcome the cost of compliance, hence making it much easier for new players to find their place within the ecosystem.”
– Julian Leitloff, CEO and founder of Fractal
Since 2017, Fractal has received USD $3 million in funding with participation from Coparion, a VC fund backed by the German government.
Gnosis builds decentralized infrastructure on Ethereum, including prediction market protocols and standards. It is the first project founded within and spun out of blockchain venture studio ConsenSys, a well-known global blockchain technology company building the infrastructure, applications, and practices that enable a decentralized world.
In 2017, Gnosis set a record by raising 250,000 Ethereum, then valued at USD $12.5 million. The fundraising was achieved via a Dutch auction, the first successful token generation event of its kind.
“Using Fractal has saved us time getting information from investors to do smart trades. It is great that we can focus on what we love to do – building applications on top of Ethereum.”
– Dr. Friederike Ernst, Chief Operating Officer of Gnosis
Digital IDs lower opportunity costs by eliminating friction within customer onboarding. World Bank’s Private Sector Economic Impacts from Identification Systems 2018 report shared that in the UK, one out of four financial services applications were abandoned due to difficulties encountered in the KYC process.
To encourage adoption, the Fractal team has made their KYC/AML solution available to all with a free service tier initiative. Fractal hopes to assist companies by removing any roadblock and transition to a more open and inclusive financial ecosystem.
The Fractal automated ID verification process has four components. (1) ID document verification; (2) liveness detection; (3) facial comparison; and (4) politically exposed persons/sanction list filtering – including human intervention if one part of the automated process fails.
Other partnerships of Fractal include Hong Kong’s Ocean Protocol, a data-sharing platform, Germany’s Bitwala, a bitcoin-based bank account app, Singapore digital currency exchange Piexgo, and derivatives exchange ALLDEX.