> For the complete documentation index, see [llms.txt](https://docs.usefarlight.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.usefarlight.com/compliance/model.md).

# Compliance at the protocol boundary

Where Farlight checks eligibility, what an attestation records, and what the protocol will never do with user funds.

{% hint style="info" %}
This page describes how the protocol enforces compliance in code. It is not legal advice.
{% endhint %}

## Why the protocol decides for itself

On-chain, Stock Tokens are plain ERC-20s with no transfer restrictions. Robinhood enforces eligibility in its own interface and at KYC'd issuance and redemption; once the tokens are out, anyone may hold them. A protocol that accepts them as collateral cannot inherit the issuer's checks and has to set its own. Farlight is non-custodial, so it sets them at the **protocol boundary**: the [access registry](/architecture/eligibility.md) is consulted at every point of entry.

## What each entry point requires

| Entry point                   | Requirement                                                               |
| ----------------------------- | ------------------------------------------------------------------------- |
| Borrowing                     | `BORROWER` attestation: KYC'd and in a non-restricted jurisdiction        |
| Lending                       | `LENDER_PROFESSIONAL`; `LENDER_RETAIL` where permitted                    |
| Taking delivery of collateral | `LIQUIDATOR` attestation, for auction buyers and in-kind recipients alike |
| Transferring a slice token    | The recipient must hold a lender attestation                              |
| Using the front-end           | Geo-fencing for restricted jurisdictions                                  |

## How enforcement works

1. **Attestations, not allowlists.** Once identity, sanctions and residency checks are complete, a KYC provider issues an EAS attestation to the wallet. It carries a role, a jurisdiction class and an expiry, and nothing personal.
2. **Renewal and revocation.** Attestations expire and have to be renewed. A revocation is effective at once.
3. **Two screening layers.** The KYC provider screens at issuance and at each renewal. The sequencer runs its own sanctions screening; TRM Labs is integrated on the chain.
4. **Replaceable policy.** The registry is an adapter, so the policy engine (EAS, ONCHAINID, Chainlink ACE) and the set of accepted issuers can be swapped through the timelock without redeploying the core. If a regulator requires tighter rules, they can be applied quickly.
5. **Public reads.** Every view function stays public, so explorers and aggregators can index the protocol.

## What the protocol never does

* Hold user funds anywhere except the escrow contracts.
* Convert fiat.
* Exercise discretion over a loan. Origination, repayment, refinance and liquidation are rule-driven and can be triggered by anyone who is eligible.

These three properties are the basis of the money-transmission and "managerial discretion" analyses in [Jurisdictions](/compliance/jurisdictions.md).

## Personal data

Personal data remains with the KYC provider and is never put on-chain. An optional zero-knowledge credential route lets a wallet prove it is eligible without revealing which provider ran the check or any underlying attribute.

## Tracking the issuer

For borrowers, Farlight mirrors the Stock Token eligibility list. If Robinhood narrows that list, the attestation issuer's rules follow it. If Stock Tokens later gain on-chain transfer hooks (ERC-7943 or ERC-3643), the escrow contract will honour them and will itself be added to the allowlist. See [Collateral roadmap](/assets/future-collateral.md).


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