Share this article
UK Banking Pilot Aims to Streamline Compliance Using Factom Blockchain
Crypto startup Knabu is launching a 30-day pilot today to put regulatory reporting on the blockchain.
Updated Sep 13, 2021, 11:39 a.m. Published Oct 31, 2019, 6:05 p.m.
Make us preferred on Google
Crypto startup Knabu is piloting bank regulatory reporting with Factom, one of the earliest enterprise blockchain companies.
Revealed exclusively to CoinDesk, the London-based firm is launching the 30-day pilot today.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Knabu is best known as a payments company with a smart-deposit product meant to help companies mitigate the risks of self-custodying assets on a blockchain. It is simultaneously applying for a UK banking license, aiming to establish itself as a bank that can serve crypto and blockchain firms normally excluded from traditional banking services.
“The purpose of the pilot is to start proving some of the efficiencies that blockchain brings – specifically as core infrastructure for a bank,” Gabrielle Patrick, founder and CEO of Knabu, told CoinDesk, adding:
“The average cost of regulatory compliance for a bank is about 30 percent of its budget. … We’re a blockchain-first company and felt that it was necessary to demonstrate the features that can remodel that.”
Compliance costs for banks are high because of how many manual processes have to be repeated. Knabu will run know-your-customer (KYC), know-your-business (KYB) and anti-money laundering (AML) checks on customers, encrypt the data, and send it to Factom to be recorded on the ethereum and bitcoin blockchains.
“We wanted to avoid repeating the same KYC, KYB and AML checks,” Hakim Mamoni, chief technology officer and co-founder of Knabu, told CoinDesk. “[Traditional banks] don’t have the same flexibility in terms of having access to the data.”
As a part of wanting to bank other underserved companies, Patrick is interested in also serving small-to-medium enterprises as well as fintech startups.
The only customer pilot participant that Knabu would name is crypto trading platform EthBits. IdentityMind will perform Knabu’s KYC and KYB checks while DMG Blockchain will use blockchain forensic tools like Blockseer and Walletscore to perform AML due diligence on customer bitcoin and ethereum wallets.
The Factom blockchain builds data chains and then preserves them on the ethereum and bitcoin blockchains using a Merkle root. Factom’s service, which in the past was operated by customers using factoid tokens, is being run entirely by Factom with Knabu pushing data to the firm using an application programming interface (API).
“This allows us to be able to borrow the security that you get from the power of the bitcoin and ethereum blockchains to verify that your data is what you claim it to be,” Carl DiClementi, vice president of product at Factom, told CoinDesk.
Knabu CEO Patrick says the pilot is in line with work from the UK’s Financial Conduct Authority exploring ways in which financial institutions can digitize regulatory reporting. In the future, Knabu aims to also test reporting capital reserves on Factom’s blockchain.
“The goal is to rip out any inefficiency and to serve underserved businesses,” Patrick said, adding:
“Many sectors are underserved because the cost is too high.”
Bank image via Shutterstock
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Gold tops $5,000 as bitcoin stalls near $87,000 in widening macro-crypto split: Asia Morning Briefing
Bitcoin’s onchain data points to supply overhang and weak participation, while gold’s breakout is priced by markets as a durable macro regime shift.
What to know:
- Gold’s surge above $5,000 an ounce is increasingly seen as a durable regime shift, with investors treating the metal as a persistent hedge against geopolitical risk, central bank demand and a weaker dollar.
- Bitcoin is stuck near $87,000 in a low-conviction market, as on-chain data show older holders selling into rallies, newer buyers absorbing losses and a heavy supply overhang capping moves toward $100,000.
- Derivatives and prediction markets point to continued consolidation in bitcoin and sustained strength in gold, with thin futures volumes, subdued leverage and weak demand for higher-beta crypto assets like ether reinforcing the cautious tone.
Top Stories
