Frax builds a global compliance program for crypto-native users in one month
When its compliance needs changed, Frax turned to Persona. Learn how Frax built a global KYC/KYB program tailormade to the needs of crypto users.
Frax is a stablecoin issuer and infrastructure platform dedicated to building a more open financial ecosystem.
Originally focused on decentralized stablecoins, lending, and trading, Frax now offers a GENIUS-compatible stablecoin (frxUSD), a dedicated blockchain (Fraxtal), and its own token (FRAX). Today, Frax also provides FraxNet, a platform that lets customers mint, redeem, and earn rewards on frxUSD across 20+ blockchains.
Frax is scaling, on top of what they call the “first stablecoin operating system.” But with that growth comes new compliance requirements in a complex regulatory landscape.
Without a KYC/KYB vendor, we’d have to build all of our compliance flows natively. It would be an extremely time-consuming learning process for anyone who’s not already an expert in compliance.
Problem: Multi-jurisdiction compliance requirements for a crypto-native platform
As Frax grew, it faced new Know Your Customer (KYC) and Know Your Business (KYB) requirements.
When Frax decided to launch FraxNet, it partnered with Bridge, a stablecoin infrastructure platform (recently acquired by Stripe), to act as its fiat on- and off-ramp. The partnership required Frax to meet certain KYC/KYB requirements — new territory for the crypto-native company.
“Prior to this, we had a more crypto-native experience where a user could just plug in their wallet and get started,” says Ryan Adami, senior software engineer at Frax. “There wasn’t a true need for KYC or KYB because we weren’t yet connecting to a bank account or distributing rewards.”
The recently passed GENIUS Act added another layer of complexity. Under the Act, stablecoin providers must comply with the Bank Secrecy Act’s anti-money laundering and counter-terrorist financing requirements. For example, they must implement KYC and a customer identification program, monitor and report suspicious activity, and conduct regular risk assessments.
Building a KYC/KYB solution quickly from scratch isn’t easy. Beyond the engineering challenge, Frax needed to solve for:
Regulatory complexity. Crypto is global, but KYC and KYB don't scale easily across borders. “If we wanted to build a compliance program manually for just the United States, we could maybe get by,” says Ryan. “But as you start adding more countries, it becomes harder to handle all of the edge cases and provide user support.”
User skepticism. Crypto enthusiasts are often deeply skeptical anytime they’re asked to share personal information. “A lot of people are scared to submit things like their IDs, Social Security numbers, tax documents,” says Ryan.
Speed to market. Building an identity verification system in-house could take months and distract the team from core product development. Frax needed a solution that could be implemented quickly and used easily by both technical and non-technical users.
“Without a KYC/KYB vendor, we’d have to build all of our compliance flows natively,” says Ryan. “So that’s building everything from the UI to every form validation. Then we’d have to replicate and update the experience for every jurisdiction."
“It would be an extremely time-consuming learning process for anyone who’s not natively an expert in compliance,” Ryan continues.
To meet these challenges while satisfying new KYC and KYB requirements, Frax turned to Persona.
When our crypto users see we’re using Persona, they’re actually more likely to complete the onboarding process.
Solution: A flexible compliance platform with global coverage
In Frax’s search for a KYC/KYB partner, Persona’s name came up immediately.
“We found out about Persona from Bridge, which uses Persona for its own compliance program,” says Ryan. “Knowing that Bridge trusts Persona gave us a lot of confidence.”
As Frax’s team looked more closely at Persona, they were impressed by how comprehensive the offering was for crypto platforms.
“Persona was the best fit for us when it came to making sure all of our users and businesses are compliant with their specific jurisdictions,” says Ryan. “The platform checked all of our boxes — everything from security to control over manual reviews for edge cases. Down the line, it’ll be easy to add more KYC or KYB features if we need them.”
“Building a compliance program for our scale would not be possible without Persona,” adds Sean Kelley, vice president of communications at Frax.
For crypto use cases, Persona stood out especially for the following reasons:
Multi-jurisdiction support. As Frax’s team began preparing for a global expansion into Mexico and Europe, they knew they needed a single solution that could support compliance worldwide. “Being able to expand to multiple jurisdictions is very important for any crypto company,” says Ryan. “Persona provided a lot of guidance for how we could support these countries.”
Flexibility and customization. Persona offers the ability to tailor and finetune KYC verification logic based on jurisdiction, risk profile, and other parameters. It also allows companies to create custom templates for different use cases.
Ease of implementation. Frax’s team appreciated how easy Persona is to use. “Persona’s onboarding process was very straightforward,” reflects Ryan. “It was easy to implement support for multiple jurisdictions.”
No-code options. Persona’s UI is simple enough for non-developers to work with directly. “We were impressed by the fact that you don’t need code to edit the verification flows,” says Ryan. “Persona provides a drag-and-drop interface that’s easy for non-technical people to use.”
Developer experience. Persona provides a fully-fledged SDK, API, webhooks, and documentation. “Just one call was enough for me as a developer to understand how to use Persona,” says Ryan. “Persona’s dashboard is awesome; it’s very comprehensive and easy to use. It has a great developer section for managing the API keys.”
Most importantly, Persona is a recognizable KYC platform. Many crypto users already trust Persona from having used it with other platforms.
“When our crypto users see we’re using Persona, they’re actually more likely to complete the onboarding process,” says Ryan. “Persona is integrated with other crypto platforms they already use, so they feel a lot more comfortable.”
Building a compliance program for our scale would not be possible without Persona.
Results: Ready to launch and GENIUS-compatible
As a result of its partnership with Persona, Frax launched its KYC/KYB program with beta users in record time.
“We completed our integration with Persona in a little over a month, which is very fast for compliance,” says Ryan. “It was a really smooth process.”
Looking ahead, they’re confident in the rollout for their broader, global user base in the US, Mexico, and Europe — with additional jurisdictions on the horizon as they unlock new use cases for stablecoins worldwide.
