# Panther Compliance

### TL;DR

* [Zone Managers](https://docs.pantherprotocol.io/docs/ecosystem/ecosystem-operators/zone-manager) determine what compliance looks like for their Zone/s
* The Protocol is agnostic as to which third-party [compliance provider/s](https://docs.pantherprotocol.io/docs/ecosystem/ecosystem-operators/compliance-providers) integrates
* The Protocol does not process user data; compliance providers do
* Transactional data can only be accessed by stakeholders with the correct keys

### Introduction

Considering the difficulties in developing a decentralized solution that preserves privacy and enables compliance, Panther designed an approach that utilizes three essential components: third-party [compliance provider](https://docs.pantherprotocol.io/docs/ecosystem/ecosystem-operators/compliance-providers) integrations, Panther [zAccounts](https://docs.pantherprotocol.io/docs/panther-core/panther-core/zaccount), and [Zones](https://docs.pantherprotocol.io/docs/panther-core/shielded-pool#shielded-pool-zones).

By leveraging the Protocol’s Zero-Knowledge characteristics, these elements collectively form a pathway to achieve compliance.

{% hint style="info" %}
Read about the [regulatory rationale](https://blog.pantherprotocol.io/enabling-compliance-while-preserving-privacy-panthers-compliance-integrations-explained/) for Panther integrating compliance tools.
{% endhint %}

Panther has built a system that retains neutrality by integrating compliance providers that accept multiple types of verification. These systems are called “multi-compliance vendors,” as they allow users to choose from a variety of compliance providers while retaining a decentralized approach.

<figure><img src="https://lh5.googleusercontent.com/q1lzVSQuKP3icSq1lPleSGHeSq6kH6a9FIe4mCLQHLqtiYjoZ0Sv_bBfZ5kXDNiLrRQX5-Sy62--1xWHf7AENvrVzFLm2tTCj0jVUh9V_P3QfP9yZHuPH7EwIVqDFNuo-0L9XG7TKC3WwBoPZrNyVNM" alt=""><figcaption><p>At mainnet beta, there will be just one verification level available for all users.</p></figcaption></figure>

For testnet, the Panther DAO was commissioned to select a [multi-compliance vendor](https://blog.pantherprotocol.io/panther-protocol-joins-forces-with-purefi-to-enable-compliance-in-prifi/) that aligns with its interests.

> Discussed in Panther’s [forum](https://forum.pantherprotocol.io/).

When integrating these providers, the following requirements are taken into consideration:

* Ability to blocklist Politically Exposed Persons (PEPs) or newly-flagged individuals based on unverified identities
* Blocklists for Externally Owned Accounts (EOAs), i.e. wallets
* Ability to create an “allowlist” to control entry to a Zone
* Preferably, the ability to have an on-chain verification list maintained through oracles/smart contracts
* Performing validations at deposit and withdrawal
* Optionally, allowing users to register multiple addresses. This is suggested so that users can break the on-chain link between their transactions by withdrawing and depositing from different addresses.
* Optionally, using a Zero-Knowledge proof to allow users to create new accounts once they have passed verification.

Panther Protocol allows compliance providers to process user data without the Protocol learning it: by proving a user’s ownership of their wallet and giving them a Zero-Knowledge proof that attests to the validity of their KYC statements. This allows users to access Panther but maintains the Protocol’s neutrality. The diagram below exemplifies this process:

<figure><img src="https://lh6.googleusercontent.com/y9VJ8dwL7xo2YnYNz5D8kBnl8ljSg7Eacd4_w7UbqCWcSO28PrdILH5z5W4dzOE6LWxl4FKd9TLsdCQjlDB7MUkiykSbQqyDLhoowoaK3HFD9xjOUv84VEIbsVjmJiuAP6Va3COJtFPNpY-KcEy_BW0" alt=""><figcaption><p>Panther’s flow for user verifications.</p></figcaption></figure>

### What next?

Not only do the compliance providers enable Zone Managers and users to demonstrate their transactional activity to regulators, but they also give the individual zAccount holder, the user, a high degree of control over what data they reveal to whom. Learn more about user reveals.