Compliance

On-Chain Compliance Mechanisms

To enable regulatory alignment without compromising decentralization or user privacy, the network employs two primary mechanisms for maintaining on-chain compliance:

1. TEE-Based Selective Disclosure

Trusted Execution Environments (TEEs) enable cryptographic decryption of transaction data only when explicitly authorized by recognized compliance or regulatory authorities.

• Halo uses secure enclaves (Intel SGX/AMD SEV) to perform selective decryption operations in isolated, hardware-protected environments that prevent unauthorized access to sensitive data.

• Private balance operations are exposed through custom EVM precompiles that interface with the TEE for encrypted state transitions.

• Decryption authority is governed by cryptographic attestation and access control policies — regulators can audit or investigate specific transactions when legally required, while all other activity remains private and verifiable.

This design ensures compliance with lawful oversight requests without introducing centralized control or compromising user privacy guarantees. The TEE provides a trustworthy foundation for selective transparency that maintains the integrity of the privacy model while meeting regulatory obligations.

2. 0xPredicate Enforcement Layer

Functions as programmable compliance constraints embedded directly into the transaction logic.

• These are on-chain enforcement rules that define whether a transaction can be executed based on jurisdictional AML/CFT requirements.

• Predicates can be configured to screen addresses, enforce KYC checks, or restrict flows to licensed entities — all at the smart contract or network layer, not at the application layer.

• This makes compliance composable: dApps, neobanks, and regulated institutions can inherit compliant behavior natively from the protocol rather than implementing their own fragmented compliance systems.

Together, MPC Decryption and 0xPredicate provide a modular compliance framework -> one focused on selective transparency and programmable enforcement, balancing privacy, auditability, and regulatory requirements in a unified design.