Source: Swarm

Swarm, a regulated DeFi platform, today launches its onboarding API, allowing institutions and enterprises who do not have a know-your-customer (KYC) and anti money laundering (AML) provider to offer regulatory-compliant tokenized securities and trading to their users under German law.

The onboarding API is intended to serve partners who do not have their own KYC provider. For partners with a KYC provider, we will soon provide a KYC Sharing API. The API verifies users’ identities and source of funds, which is typical for onboarding to stock brokerage accounts to trade securities.

Philipp Pieper, co-founder of Swarm, said “There is a flight to quality assets on chain. We are seeing interest from crypto and DeFi primitive companies who want to offer a range of tokenized asset classes to their users but do not have the infrastructure to do so. Swarm’s solution removes friction and increases access to tokenized securities by providing a KYC onboarding process that is regulatory compliant in Germany.

“These developments are necessary to improve the overall health of the on-chain ecosystem and onboard more people and institutions that want to remove counterparty risk.”

The API enables a client to embed an onboarding flow into their application, providing a more seamless user experience for their customers. The KYC and AML process leads users through an identity verification flow, allowing them to submit documents and information, and tracks the status of their onboarding. Once verified, users are permissioned to interact with Swarm’s tokenized t-bills and public stocks, like Apple and Coinbase, on the Polygon network.

Swarm offers two environments for clients:
• Sandbox (Mumbai): For integrations in a test environment. No real checks are performed in the sandbox environment, when a client is testing the integration with Swarm’s API. All transactions are executed for free on the Polygon Testnet, Mumbai.
• Production (Polygon): For integrations ready to go live. In order to provide clients with access to the production environment, Swarm requires the integration to be tested first.

Timo Lehes, co-founder of Swarm, said: “There has been an explosion in tokenized securities this year but few platforms can sell these to retail investors due to regulatory reasons. Swarm’s tokenized assets have a prospectus registered in Liechtenstein, meaning we can offer these to retail investors at no minimum investment. As a result, a lot of institutions are coming to us wanting to white label our assets and trading infrastructure to offer a diversified set of assets to their users on chain.”

Swarm is a hybrid, combining the security of regulation with the flexibility of decentralization. So far, it has 11 tokenized assets, including Apple, Blackrock, Coinbase, Coupang, Intel, Microsoft, Microstrategy, NVIDIA and Tesla, plus two fixed income products iShares US treasury bond 0-1 year and iShares US treasury bond 1-3 years.

The assets can be directly accessed and traded in AMM pools on app.swarm.com or white labeled into third party platforms. Swarm’s technology and regulatory stack can be applied to almost any financial product.