Passing KYC/KYB with Banks, Exchanges, and Other TradFi Providers

Will a Bank, Exchange, or Other TradFi Provider Approve my DAO LLC?

MIDAO recommends applying to a few providers at once or preparing for the possibility that you may have to try more than one before being approved, and it can take time.

Passing KYC/KYB with a Bank, Exchange, or Other TradFi Provider

Keep in mind that every provider decides independently how to conduct their compliance process. Each provider may ask for different documents, use different names for them, accept different things as adequate submissions, define terms differently, etc. You often have to get creative, be persistent, communicate with the provider, and try multiple submissions before you pass KYB.
Formational Documents
- Providers will usually require you to submit your formational documents and may ask for certified or notarized copies of certain documents (such as a Certificate of Good Standing or Certificate of Incumbency) which MIDAO can provide to you.
- Certificate of Formation: this is the DAO LLC's formational document and is equivalent to what a provider might call a "certificate of incorporation" or something else.
- Operating Agreement: this is the DAO LLC's governing document and is equivalent to what a provider might call "bylaws," "memorandum of association," "articles of association," or something else.
Registered or Official Address
- Every Marshall Islands DAO LLC's official registered address is:
  - [DAO LLC Name], 852 Lagoon Rd., Majuro, Marshall Islands MH 96960
Operating Address
- Providers will often ask for proof of an operating address, i.e., a place where someone at the company physically operates. While MIDAO provides you with an official, registered address for your company (see above), we cannot, by its definition, provide you with an operating address.
- The operating address will usually need to be accompanied by a utility bill (either in the company's name or in the name of the person using their personal address).
- You may need to get in touch with the provider to figure out what will be acceptable to them if your organization does not have a physical office somewhere.
List of Members
- Providers may use different terminologies for members, such as shareholders or owners, even though many corporate types do not have shareholders or owners. For example, DAO LLCs, like other LLCs, technically have "members," not "shareholders," and non-profit companies usually have no "owners" but are still expected to answer the question.
- If your DAO LLC keeps a full list of its members in its Operating Agreement, submitting the Operating Agreement (or the relevant pages of it) may suffice.
- If your DAO LLC uses a token or multi-sig to track membership, be prepared to get creative or communicate with the provider to figure out how to pass KYB.
- Sometimes, a provider will require or otherwise accept a separate list of members, such as a list on company letterhead signed by an authorized person.
List of Managers
- Providers may use different terminologies for managers, such as directors, officers, board members, etc., even though many corporate types do not have such titles. For example, DAO LLCs, like other LLCs, technically have "managing members," not "directors" or "officers," and will be expected to submit a list of their managers.
- If you do not have any managers (since the DAO LLC makes it optional to have managers), you will have to consider whether to amend your Operating Agreement to elect managers or contact the provider to try to find a way to pass KYB without managers.
- If your DAO LLC keeps a full list of its managers in its Operating Agreement, submitting the Operating Agreement (or the relevant pages of it) may suffice.
- If your DAO LLC uses a token or multi-sig to track its managers, be prepared to get creative or communicate with the provider to figure out how to pass KYB.
- Sometimes the provider will require or otherwise accept a separate list of managers, for example, a list on company letterhead signed by an authorized person.
List or Proof of Beneficial Ownership
- Note that every provider (and country) defines beneficial ownership differently. While it's possible a provider will ask for your beneficial ownership as defined by your local jurisdiction (the Marshall Islands), it's more likely they will have their own definition you have to follow.
  - Note that this might mean that you have to say someone is a beneficial owner during your KYB process with the provider, even if that person is not considered a beneficial owner by MIDAO or the Marshall Islands.
- MIDAO can provide a certified Certificate of Incumbency showing your beneficial ownership (as defined by the Marshall Islands for DAO LLCs) based on your DAO LLC's latest government filings. Depending on the provider's compliance policy, submitting this document to the provider may or may not suffice as proof of beneficial ownership.
- MIDAO can also provide a certified Beneficial Owners Information Report (BOIR), which DAO LLCs are required to submit to MIDAO when creating a DAO LLC and every year during annual filings. Depending on the provider's compliance policy, submitting this document to the provider may or may not suffice as proof of beneficial ownership.
- If your DAO LLC keeps a full list of its members, managers (if any), and membership interest (i.e. voting or ownership rights) in its Operating Agreement, submitting the Operating Agreement (or the relevant pages of it) may suffice as proof of beneficial ownership.
- If your DAO LLC uses a token or multi-sig to track its members and their voting or ownership rights, be prepared to get creative or communicate with the provider to figure out how to prove beneficial ownership.
- Sometimes a provider will require or otherwise accept a separate list of beneficial owners, for example, a list on company letterhead signed by an authorized person.
Financial Information
- Providers will often ask for your source or use of funds, or for other financial information.

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Last updated 8 days ago

Passing KYC/KYB with a Bank, Exchange, or Other TradFi Provider

Keep in mind that every provider decides independently how to conduct their compliance process. Each provider may ask for different documents, use different names for them, accept different things as adequate submissions, define terms differently, etc. You often have to get creative, be persistent, communicate with the provider, and try multiple submissions before you pass KYB.

Formational Documents

Providers will usually require you to submit your formational documents and may ask for certified or notarized copies of certain documents (such as a Certificate of Good Standing or Certificate of Incumbency) which MIDAO can provide to you.
Certificate of Formation: this is the DAO LLC's formational document and is equivalent to what a provider might call a "certificate of incorporation" or something else.
Operating Agreement: this is the DAO LLC's governing document and is equivalent to what a provider might call "bylaws," "memorandum of association," "articles of association," or something else.

Registered or Official Address

Every Marshall Islands DAO LLC's official registered address is:
- [DAO LLC Name], 852 Lagoon Rd., Majuro, Marshall Islands MH 96960

Operating Address

Providers will often ask for proof of an operating address, i.e., a place where someone at the company physically operates. While MIDAO provides you with an official, registered address for your company (see above), we cannot, by its definition, provide you with an operating address.
The operating address will usually need to be accompanied by a utility bill (either in the company's name or in the name of the person using their personal address).
You may need to get in touch with the provider to figure out what will be acceptable to them if your organization does not have a physical office somewhere.

List of Members

Providers may use different terminologies for members, such as shareholders or owners, even though many corporate types do not have shareholders or owners. For example, DAO LLCs, like other LLCs, technically have "members," not "shareholders," and non-profit companies usually have no "owners" but are still expected to answer the question.
If your DAO LLC keeps a full list of its members in its Operating Agreement, submitting the Operating Agreement (or the relevant pages of it) may suffice.
If your DAO LLC uses a token or multi-sig to track membership, be prepared to get creative or communicate with the provider to figure out how to pass KYB.
Sometimes, a provider will require or otherwise accept a separate list of members, such as a list on company letterhead signed by an authorized person.

List of Managers

Providers may use different terminologies for managers, such as directors, officers, board members, etc., even though many corporate types do not have such titles. For example, DAO LLCs, like other LLCs, technically have "managing members," not "directors" or "officers," and will be expected to submit a list of their managers.
If you do not have any managers (since the DAO LLC makes it optional to have managers), you will have to consider whether to amend your Operating Agreement to elect managers or contact the provider to try to find a way to pass KYB without managers.
If your DAO LLC keeps a full list of its managers in its Operating Agreement, submitting the Operating Agreement (or the relevant pages of it) may suffice.
If your DAO LLC uses a token or multi-sig to track its managers, be prepared to get creative or communicate with the provider to figure out how to pass KYB.
Sometimes the provider will require or otherwise accept a separate list of managers, for example, a list on company letterhead signed by an authorized person.

List or Proof of Beneficial Ownership

Note that every provider (and country) defines beneficial ownership differently. While it's possible a provider will ask for your beneficial ownership as defined by your local jurisdiction (the Marshall Islands), it's more likely they will have their own definition you have to follow.
- Note that this might mean that you have to say someone is a beneficial owner during your KYB process with the provider, even if that person is not considered a beneficial owner by MIDAO or the Marshall Islands.
MIDAO can provide a certified Certificate of Incumbency showing your beneficial ownership (as defined by the Marshall Islands for DAO LLCs) based on your DAO LLC's latest government filings. Depending on the provider's compliance policy, submitting this document to the provider may or may not suffice as proof of beneficial ownership.
MIDAO can also provide a certified Beneficial Owners Information Report (BOIR), which DAO LLCs are required to submit to MIDAO when creating a DAO LLC and every year during annual filings. Depending on the provider's compliance policy, submitting this document to the provider may or may not suffice as proof of beneficial ownership.
If your DAO LLC keeps a full list of its members, managers (if any), and membership interest (i.e. voting or ownership rights) in its Operating Agreement, submitting the Operating Agreement (or the relevant pages of it) may suffice as proof of beneficial ownership.
If your DAO LLC uses a token or multi-sig to track its members and their voting or ownership rights, be prepared to get creative or communicate with the provider to figure out how to prove beneficial ownership.
Sometimes a provider will require or otherwise accept a separate list of beneficial owners, for example, a list on company letterhead signed by an authorized person.

Financial Information

Providers will often ask for your source or use of funds, or for other financial information.