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Zero-Knowledge Proofs (ZKP)

Overview

A Zero-Knowledge Proof (ZKP) is a cryptographic method that allows one party (the prover) to prove to another (the verifier) that a statement is true without revealing the underlying information. For example, a user can prove they are over 18 without disclosing their exact date of birth. In compliance and financial services, ZKPs are increasingly applied in digital identity verification, privacy-preserving KYC, and blockchain transactions..
They help institutions meet regulatory requirements while protecting user privacy by minimizing unnecessary data exposure. ZKPs also reduce risks related to data breaches, since sensitive attributes never leave the user’s control. By combining transparency with confidentiality, ZKPs are becoming essential tools for banks, fintechs, and crypto service providers to strengthen trust and security in compliance workflows.

FAQ

What is a Zero-Knowledge Proof?

A cryptographic method to prove something without disclosing underlying data.

Why is it useful in compliance?

It balances privacy with AML/KYC obligations by limiting data exposure.

Where is it applied?

In privacy-preserving KYC, blockchain, and secure transactions.

What are the challenges?

Technical complexity, interoperability, and pending regulatory frameworks.