📄How ME ID Balances KYC and Privacy Protection

Firstly, as an infrastructure, ME Network provides foundational support for third-party certification authorities to issue identity proofs for specific addresses. The information users put on the blockchain is divided into publicly recorded SBTs and VCs that do not record content on-chain. Since SBTs do not contain any of the user's private information, they inherently do not leak user privacy.

Secondly, the KYC process is the first Issuer service within the ME ID system, rather than a function run by ME Network itself. KYC Issuers are operated by country zone node operators in cooperation with third-party identity certification institutions under regulatory compliance. In this process, users' identity information is collected by third-party certification authorities, which issue identity proofs to the users' bound wallet addresses. ME DAO and the country zone node operators do not participate in the collection process of user information.

Finally, to assist local third-party certification institutions in collecting and verifying user identities while protecting user privacy, ME Network will provide privacy-protecting technical solutions, such as:

• Using homomorphic encryption algorithms to pre-encrypt sensitive biometric data locally. Users encrypt biometric data like facial images and voice prints using homomorphic encryption algorithms (e.g., BFV homomorphic encryption) in their local environment, generating irreversible ciphertext. Homomorphic encryption supports operations in the ciphertext domain, enabling servers to perform verification and comparison operations on ciphertext without being able to decrypt and access the original plaintext data.

• KYC data processing uses fine-grained segmentation, extracting only necessary features to minimize the transmission of sensitive information.

• Zero-knowledge proof generation and verification methods based on assertions are also applied in KYC data processing to further protect user privacy.

• Verifiers can only perform verification operations using ciphertext and cannot decrypt to access plaintext, reducing the risk of data leakage.

Given the diversity of technological levels and regulatory requirements globally, as well as the regional characteristics of identity proof extraction and privacy protection, ME Network will actively assist operators in establishing KYC infrastructure that complies with local policies.