Financial Services

Streamlining Compliance at Paxos

Paxos, operating in a highly regulated cryptocurrency environment, brought in Def Method to help automate their compliance, eliminating manual processes and improving transaction turnaround time.

Services Provided

Web Development, Application Modernization

Product Type

Web Application

Technologies Used

React, JavaScript, .NET, Chef

Project Highlights

Def Method reduced the risk of errors and fraud by creating automated requirements around the process of moving money

Minimized disruption of compliance workflow by keeping both the legacy system and the new system running until the transition was complete

Built an internal trading tool that connects traders and internal team members to each other and to cloudware and infrastructure services

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Paxos is a regulated financial institution building infrastructure to enable movement between physical and digital assets. Streamlining the compliance process around monetary transactions has a huge impact on Paxos’ ability to serve its clients. Paxos was interested in automating their existing process and improving the turn around time in processing transaction requests.


In the world of cryptocurrency transactions, adhering to anti-money laundering (AML) regulations and following Know Your Customer (KYC) procedures are imperative to compliance with the law. At Paxos, a lot of compliance procedures were manual with multiple actors involved in data entry and data verification across a multi-step process. This also required robust communication within the compliance team as data moved through verification stages. This made compliance slow, resulting in a 7-day turnaround time for some transactions.


The Def Method team developed an understanding of the compliance team's manual processes and built a web app that eliminated a lot of the existing manual data exchange. They did this by collaborating directly with the end users and understanding what actions were performed at each step in the process. They worked with the users to identify how the web app could be iteratively developed so that parts of the compliance process could be automated while automations for other parts of the compliance process were still being developed. The team automated the KYC tests that had previously been performed manually, drastically reducing the time it took to get these tests done.

In addition to streamlining the compliance process, our team also opened up Paxos' system to handle additional currencies. The UI and backend had been built for Bitcoin and fiat transitions only. By making the system flexible to support other currencies, our team enabled Paxos to include support for Ethereum transactions for their clients. As we worked on enhancements to Paxos’ system, in order to prevent a disruption in service, our team balanced keeping both their legacy system and the new system running until all changes were complete.


As a result of the Def Method team’s work, Paxos was able to settle trades 7X faster, taking the time to process transactions and conduct the necessary compliance from seven days down to one day. By automating Paxos’ manual compliance process, we improved efficiency and reduced the risk of errors and fraud. We also incorporated compliance support for Ethereum to a system that had only supported Bitcoin and fiat transactions.