Compliance Model

Bond Tokens balance regulatory compliance with DeFi innovation through a hybrid approach:

Trading is permissionless: Buying and selling Bond Tokens on DEXs and transferring them between wallets do not require KYC. There is no KYC-based transfer restriction on Bond Tokens except blacklisted addresses. (See KYC revocation and blacklisting).

Proceeds flows require KYC: Claiming coupons, redeeming principal, and receiving call settlement proceeds all require the recipient wallet to have valid KYC. Whitelisted Bondi vaults (Reinvestment Vault and Redemption Vault) are treated as eligible recipients at the distribution layer (the compliance check for vault depositors occurs at the vault's own exit points. The Admin Safe is also an eligible recipient, for the limited purpose of claiming coupons on Bond Tokens it holds in compliance custody (relocated from KYC-revoked addresses under compliance policy). Wallet-held Bond Token relocation via complianceBurn is invoked only when explicitly mandated by the regulator) KYC revocation alone does not trigger it. A holder whose KYC is revoked but who is not subject to such action retains their Bond Tokens and onchain entitlements and remains blocked from claiming until KYC is restored, after which regular claim paths apply.

Where the line sits: Bondi's compliance perimeter is the moment value flows from Bondi to a wallet (issuance/minting, and every coupon, principal, and call payout) never the holding or transfer of tokens. A wallet that is not KYC-verified can always hold Bond Tokens and vault shares, trade them peer-to-peer, and exit its position in Bond Token form; it is simply never paid a bond's stablecoin proceeds until it completes KYC.

KYC revocation and Bond Token blacklisting: These are two separate onchain checks: KYC eligibility on the registry and blacklist status on the Bond Token. Every KYC revocation also blacklists the holder on every attached Bond Token, atomically in the same transaction, but blacklisting alone does not imply the address was ever KYC-registered or revoked; a holder can be blacklisted on the Bond Token without a registry record (for example, a permissionless secondary-market acquirer). Revocation clears the eligibility flag and blocks proceeds claims; blacklisting blocks Bond Token transfers and is required before onchain compliance actions such as emission-round relocation, complianceBurn (when explicitly mandated), or Redemption Vault force-close.

This model maintains the regulatory standards required for traditional bond market participation while enabling permissionless secondary market activity and DeFi integration via vault products.