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USD Compliance

The USD token on SphereNet implements compliance through Sphere Guard, a specialized transfer hook program that works in conjunction with Sphere verification badges. This integration creates a robust system for ensuring all participants meet regulatory and compliance requirements while maintaining operational efficiency.

Transfer Validation​

Every USD transfer undergoes comprehensive validation through Sphere Guard in the following sequence:

  1. Verification of valid Sphere badges for both sender and receiver
  2. Examination of badge metadata against required compliance parameters
  3. Validation of any additional account-specific rules from configured allowlists
  4. Enforcement of transfer restrictions based on validation results

This structured validation process provides a flexible framework for compliance management while ensuring consistent enforcement of rules.

Badge Requirements​

The Sphere verification badge serves as the cornerstone of the compliance system. Each badge contains essential information about the token holder, including their entity type classification, jurisdiction information, and compliance status. The badge also maintains current risk assessment levels and required regulatory attestations. This comprehensive badge data enables sophisticated, real-time compliance verification for every transaction.

Account-Level Controls​

Through Sphere Guard's allowlist functionality, token accounts can implement precise control over their transactions. Account owners can specify required metadata parameters, establish transfer limits, and enforce entity type restrictions. The system supports jurisdiction-specific rules and allows for custom validation logic, providing the flexibility needed for diverse institutional requirements.

Implementation​

At the token level, the USD mint is configured to use Sphere Guard for all transfers. This integration automatically validates every transaction against established badge requirements and enforces compliance rules across the network. The system maintains transfer restrictions while enabling account-specific controls, creating a complete audit trail through badge verification. This sophisticated combination of Sphere Guard and verification badges establishes a compliance framework that balances robust regulatory requirements with operational efficiency.