Security & Privacy
Security and privacy are foundational pillars of the Stobox DID system. Because DID serves as the identity backbone for regulated financial operations, any compromise would threaten compliance integrity, investor protection, and institutional trust. This chapter outlines the security model, privacy protections, access control mechanisms, and risk mitigation strategies built into the Stobox DID architecture.
The DID system balances strong cryptographic guarantees, enterprise-grade operational controls, and privacy-preserving data handling to meet the needs of institutions operating in strict regulatory environments.
Security Principles
Stobox DID is designed around the following core principles:
Integrity
Identity records and attributes must be tamper-proof, verifiable, and consistent across the entire ecosystem.
Access Restriction
Only authorized actors should modify identity or compliance information.
Resilience
The system must withstand attacks, misuse, and operational errors without compromising identity integrity.
Auditability
Every identity-related action must be traceable and immutable.
Privacy Protection
No sensitive personal data may be exposed on-chain.
These principles guide all design decisions within the DID architecture.
On-Chain Security Architecture
Smart Contract Immutability
The DID registry is implemented as a secure, immutable smart contract:
tamper-proof data
transparent state changes
cryptographically enforced permissions
This ensures identity data cannot be altered outside of authorized methods.
Role-Based Access Control (RBAC)
RBAC ensures that only credentialed administrators can modify identity data.
Roles include:
Admin — full control
Writer — modify attributes/wallets
Reader — read-only
External Reader — time-limited read access
This prevents unauthorized changes and helps enforce operational segregation of duties.
Linked Wallet Security
Wallets inherit permissions from the DID. If a wallet is compromised:
it can be deactivated or removed
the DID remains intact
other linked wallets remain safe
This model minimizes risk exposure.
Event Logging for Immutable Audit Trails
All key events (wallet linking, attribute updates, blocking, revocation) are logged on-chain. Logs are:
permanent
transparent
cryptographically signed
auditable by regulators and compliance teams
This ensures accountability at every step.
Off-Chain Security & Verification
Although the DID contract stores identity metadata, sensitive personal data must remain off-chain.
KYC/KYB Off-Chain Verification
Identity verification is completed through regulated KYC and KYB systems. Only minimal verification proofs are reflected on-chain as attributes.
Private Data Vaults
If sensitive user information needs to be stored, it is kept:
encrypted
off-chain
access-controlled
isolated per region if required
Minimal On-Chain Exposure
Only non-sensitive attributes are stored on-chain:
eligibility
verification status
jurisdiction codes
accreditation flags
This ensures full regulatory compliance without sacrificing privacy.
Attribute Privacy & Selective Disclosure
Identity attributes are used to enforce compliance, but do not reveal private user details.
Selective Attribute Checks
Smart contracts verify:
whether a condition is met
not why it is met
For example:
A token checks “is accredited investor?”
It does not learn personal income or net worth.
Access Control on Attribute Reading
Only approved roles can read detailed attributes. External readers receive time-limited access.
Threat Models & Mitigations
Threat 1: Unauthorized Attribute Modification
Mitigation: Strict RBAC, contract whitelist, protected administrative functions.
Threat 2: Wallet Compromise
Mitigation: Wallet deactivation, DID-level blocking, multi-wallet redundancy.
Threat 3: Identity Spoofing
Mitigation: Each DID is tied to verified KYC/KYB and linked cryptographic signatures.
Threat 4: Data Leakage
Mitigation: Minimal on-chain metadata + encrypted off-chain storage + access-controlled endpoints.
Threat 5: Compliance Evasion
Mitigation: Assets validate every transaction against DID attributes before execution.
Threat 6: Malicious Admin Actions
Mitigation: Role separation, audit logs, multi-admin governance policies.
Regulatory Alignment & Compliance
Stobox DID supports compliance with global data protection frameworks:
GDPR (EU)
CCPA (California)
PIPEDA (Canada)
AMLD5/6 (EU Anti-Money Laundering Directives)
FATF travel rule recommendations
Securities and financial regulations requiring investor verification
Because DID stores only minimal compliance flags and not personal data, the architecture remains legally compliant across multiple jurisdictions.
Identity Revocation & Emergency Controls
Institutional systems require the ability to quickly respond to risk events.
DID supports:
Immediate Blocking
Used when:
sanctions lists update
fraud is detected
suspicious activity arises
Permanent Revocation
Used when:
identity is fraudulent
legal conditions require removal
business entity is dissolved
These actions disable all linked wallets.
Operational Security for Enterprise Admins
Enterprises using DID should implement:
multi-admin approval workflows
secure key management for admin wallets
regular monitoring of DID event logs
automated alerts for expired or revoked attributes
internal policy alignment for attribute issuance
Operational discipline ensures DID functions as part of a broader enterprise control environment.
Summary
Stobox DID combines cryptographic security, strict access control, privacy-preserving identity architecture, and auditable on-chain operations to protect regulated tokenized ecosystems.
It ensures:
identities are verifiable
attributes are trusted
compliance is enforced
private data is protected
risk is minimized
regulatory alignment is maintained
This security and privacy foundation makes Stobox DID suitable for institutions, enterprises, asset issuers, custodians, and regulators who require the highest standards of protection and trust.
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