Forte, the compliance company for blockchain projects, has acquired Sealance Corp., the creators of technology for Web3 identity and privacy.

Sealance created the first zero-knowledge (ZK) policy engine to facilitate regulatory compliance on decentralized blockchains. Through this integration, Web3 developers can now leverage the ZK policy engine with Forte’s Rules Engine to conduct compliant know-your-customer (KYC) verification and manage on-chain identities across real-world assets (RWAs), stablecoins, DeFi, and institutional use cases – all while maintaining privacy through Sealance’s ZK technology. 

“We have created a framework where trust, compliance, and privacy coexist together,” said Matthew Green, cofounder of Sealance, in a statement. “We are driving innovation in tokenized identity and programmable compliance to address one of the most significant challenges to crypto adoption: establishing confidence in decentralized technologies.”

Green added, “Using advanced technologies like zero-knowledge proofs, we can uphold regulatory standards via robust on-chain mechanisms, while preserving user privacy. This is the future of digital identity, and the way to win the trust of both users and regulators.”

In an interview with GamesBeat, Green said Sealance’s chain-agnostic compliance systems technology uses ZK proofs to verify identities, enforce policy compliance and assure transaction integrity using a blockchain-native consensus mechanism. Built with privacy at its core, the technology can reason about transactions, identity and risk indicators without exposing any information except as specifically prescribed by policies, whose specifications are public and auditable.

Once users are verified and obtain identity credentials using Sealance’s technology, they can use these certificates across different applications and platforms without the need to repeatedly reveal personal details. Forte’s robust suite of solutions will integrate Sealance’s ZK policy engine, enhancing its broader Web3 compliance offering. This addition will complement Forte’s existing Rules Engine, KYC infrastructure, and streamlined crypto and fiat payment ramps. 

“Sealance is composed  of some of the world’s most talented and distinguished researchers in cryptography and information security, and we are thrilled to have them join our mission to build safer and more sustainable Web3 ecosystems,” said Bela Pandya, CEO of Forte. “Sealance’s technology represents a significant advancement in achieving a higher standard of privacy and compliance for users navigating decentralized transactions.”

Pandya was previously CFO at Forte but took over after cofounder Josh Williams left to be “part of the ecosystem” in December. A spokesperson for the firm said, “Given Forte’s strategic decision to expand beyond games and lean into our strengths in regulatory compliance, Josh stepped into an ecosystem role in Q4 2024, while Bela takes the helm at Forte Labs with her deep expertise in fintech and traditional financial services.”

The company raised $725 million in 2021, an astounding transaction that reflected the excitement around blockchain at the time, but reports surfaced that it was behaving in secretive ways. Forte was called out recently for perplexing layoffs at Phoenix Labs, which it secretly bought a couple of years ago. Forte also quietly purchased Rumble Games.

Forte said the Forte Rules Engine is a solution for developers to build safe, on-chain environments and manage digital asset economies. Developers can define and enforce rules, establish transaction guardrails, manage compliance obligations, and mitigate the risks of volatility and bad actors — all while supporting long-term digital asset utility and economic health. Fully compatible with all EVM chains and Web3 wallets, the Rules Engine provides developers the on-chain technology they need to build a safe, sustainable economy that their communities trust.

The Forte Rules Engine is now available for developers, who can learn more about the ZK integration by visiting: forte.io/developers/zk.

Green said his company started in 2020, in the midst of the pandemic, to build a technology that could bring more privacy and trust to blockchain transactions. Hackers had a field day in cryptocurrency circles, and so security and compliance became more important.

“We just got to the point where we were signing on [stablecoin customers] and then we joined Forte,” Green said.

Green noted that when you do a transaction on a regular cryptocurrency network like Ethereum, you don’t know who you’re talking to and you don’t know if the person sending you money is really doing it.

“We created these basic pools which we call compliant pools,” he said.

There are pre-screened people who have been checked for anti-money laundering compliance. With know-you-customer rules, a person has to provide identification, fingerprints or other verifying data. Once they’ve been cleared, they don’t have to do it again. And rather send this information over the blockchain where it could be viewed by everyone, Sealance encrypts the private information.

This is what is considered a “zero knowledge” proof, where someone is essentially prechecked and does not have to reveal identity information again, Green said. Most blockchain transactions are starting to use such ZK proofs.

When a person does another transaction, there’s a record of what they had done before. Sealance can check for any suspicious signs, but it can conclude it’s the same person again because the person is still in the compliance pool and doesn’t have to provide identification again.

Green said it’s kind of like being in the secure part of an airport. You present you ID at the security screening, but once you go inside you are trusted. You don’t have to constantly show an ID or your fingerprints etc. If there are some red flags, then the transaction gets more scrutiny. Otherwise, you can move about and do transactions inside the pool, which is secure.

Sealance can combine its secure process with Forte’s Rules Engine, which works with Ethereum. And all of the information can be used in clearing transactions and people quickly as blockchain transactions become more plentiful.

“The Rules Engine works on the Ethereum side, and we’ve been focusing on the privacy side, the zero knowledge side, and building these two things together and integrating them, and that’s what we’ve been focused on,” Green said. “We are building this combined system that works across multiple blockchains, gives privacy and also could enforce pretty complicated policies.”

Green said his team managed to do this with about six or seven people. It raised a round of money before but the amount raised wasn’t disclosed. The price for Sealance also wasn’t revealed.

Green said the timing is good.

“My belief is that this is one of the big missing ingredients for mainstream adoption,” he said. “We cannot have adoption of cryptocurrency until we have compliance figured out. There’s just too much room for theft, and bad stuff can happen.”