Note: When a crypto project receives a request from a regulator and data is scattered across logs and unstructured storage — it's a disaster. We've seen cases where KYC documents were stored in open-source S3 without encryption and with no retention policy. The team spent weeks manually gathering archives, and 40% of files were inaccessible due to expired links. A fine for FATF violations could reach $500,000. With over 5 years of experience and 50+ successful projects in crypto compliance, we guarantee your system meets regulatory standards. Typical project cost ranges from $15,000 to $30,000, depending on complexity. Our compliance audit costs $2,500 and includes a detailed implementation plan.
What Regulatory Requirements Must Be Considered?
FATF R11: store KYC documents and transaction records for at least 5 years (some jurisdictions require 7 or 10 years). GDPR: data not longer than necessary — resolved via legal basis "legal obligation" for AML data. MiCA/VASP licenses: full audit trail of all decisions, including compliance decisions. Without an automated system, meeting these deadlines is impossible — 95% of regulator issues stem from a missing clear retention policy. In VASP-licensed jurisdictions, retention may extend to 10 years, and data governance policies (including blockchain-based solutions) must explicitly designate owners for each data type.
Architecture of the KYC and AML Data Store
interface RegulatorDataStore {
storeKYCDocument(params: {
userId: string;
documentType: "PASSPORT" | "DRIVING_LICENSE" | "UTILITY_BILL" | "SELFIE" | "OTHER";
fileContent: Buffer;
mimeType: string;
expiresAt?: Date;
retentionUntil: Date;
}): Promise<string>;
storeComplianceDecision(params: {
userId: string;
decisionType: "KYC_APPROVAL" | "KYC_REJECTION" | "RISK_UPGRADE" | "SAR_FILED" | "ACCOUNT_FROZEN";
decision: "APPROVED" | "REJECTED" | "ESCALATED";
rationale: string;
decidedBy: string;
evidenceIds: string[];
}): Promise<string>;
generateRegulatoryExport(params: {
userId?: string;
dateRange?: { from: Date; to: Date };
dataTypes: string[];
}): Promise<RegulatorExport>;
}
This interface covers 90% of scenarios: uploading documents with metadata, storing AML decisions, and preparing exports. The contract separates business logic from physical storage.
Why Is AES-256 Encryption Critical for KYC Data?
All documents are stored encrypted. If keys are lost — data becomes inaccessible; if compromised — a violation. We use envelope encryption: each document is encrypted with a unique data key, and that key is encrypted with a KMS master key. Example implementation:
class EncryptedDocumentStore {
private readonly KMS_KEY_ID = process.env.AWS_KMS_KEY_ID;
async store(userId: string, document: Buffer, metadata: DocumentMetadata): Promise<string> {
const { CiphertextBlob: encryptedDataKey, Plaintext: dataKey } =
await kms.generateDataKey({ KeyId: this.KMS_KEY_ID, KeySpec: "AES_256" }).promise();
const iv = crypto.randomBytes(16);
const cipher = crypto.createCipheriv("aes-256-gcm", dataKey, iv);
const encryptedDoc = Buffer.concat([cipher.update(document), cipher.final()]);
const authTag = cipher.getAuthTag();
const docId = crypto.randomUUID();
await s3.putObject({
Bucket: process.env.KYC_BUCKET,
Key: `${userId}/${docId}`,
Body: encryptedDoc,
Metadata: {
"encrypted-data-key": encryptedDataKey.toString("base64"),
"iv": iv.toString("base64"),
"auth-tag": authTag.toString("base64"),
"user-id": userId,
"document-type": metadata.documentType,
"retention-until": metadata.retentionUntil.toISOString(),
},
}).promise();
await db.saveDocumentRecord(docId, userId, metadata, encryptedDataKey.toString("base64"));
return docId;
}
async retrieve(docId: string): Promise<Buffer> {
const record = await db.getDocumentRecord(docId);
const s3Object = await s3.getObject({ Bucket: process.env.KYC_BUCKET, Key: `${record.userId}/${docId}` }).promise();
const { Plaintext: dataKey } = await kms.decrypt({
CiphertextBlob: Buffer.from(record.encryptedDataKey, "base64"),
}).promise();
const iv = Buffer.from(s3Object.Metadata!["iv"], "base64");
const authTag = Buffer.from(s3Object.Metadata!["auth-tag"], "base64");
const decipher = crypto.createDecipheriv("aes-256-gcm", dataKey, iv);
decipher.setAuthTag(authTag);
await db.logAccess(docId, "READ");
return Buffer.concat([decipher.update(s3Object.Body as Buffer), decipher.final()]);
}
}
Each document is encrypted with a unique data key, and the key is encrypted with a KMS master key. This allows secure key storage in the database and revocation of access when needed. Rotating the master key every 6–12 months is a security standard.
How to Configure Retention Policy Without GDPR Conflicts?
@Cron("0 3 * * *")
async enforceRetentionPolicy() {
const expiredDocs = await db.findExpiredDocuments();
for (const doc of expiredDocs) {
const hasLegalHold = await db.checkLegalHold(doc.userId);
if (hasLegalHold) {
await db.extendRetention(doc.id, doc.userId, "LEGAL_HOLD");
continue;
}
await s3.deleteObject({ Bucket: process.env.KYC_BUCKET, Key: `${doc.userId}/${doc.id}` }).promise();
await db.markDocumentDeleted(doc.id, "RETENTION_EXPIRED");
}
}
Daily expiration checks. Legal hold pauses deletion — data remains until the hold is lifted. All actions are logged for audit trail. This approach avoids GDPR violations (deletion after expiry) while meeting FATF requirements (retention until expiry). Legal hold is a mechanism that blocks data deletion if needed for investigation or litigation. We implement it through a separate flag in the database: upon receiving a legal hold notification from legal, the system marks all user documents as protected. The cron job skips such records during cleanup. After the hold is lifted, data is deleted in the next cycle.
What Is Included in Regulatory Export?
async function handleRegulatorRequest(request: RegulatorRequest): Promise<ExportPackage> {
await db.logRegulatorRequest(request);
const [kycDocs, transactions, amlDecisions, sars] = await Promise.all([
docStore.getKYCDocuments(userId),
db.getTransactions(userId, dateRange),
db.getComplianceDecisions(userId),
db.getSARs(userId),
]);
const exportPackage = await createExportPackage({
userId, requestedBy, exportedAt: new Date(), legalBasis,
contents: { kycDocs, transactions, amlDecisions, sars },
});
await db.logDataExport(userId, request.id, exportPackage.manifest);
return exportPackage;
}
Exports are generated in seconds, including all documents and metadata. The manifest allows the regulator to verify completeness and integrity.
How Does Data Governance Affect Compliance Audits?
Without a clear data governance policy, a regulatory audit becomes chaos. Every KYC status change decision must be logged with the responsible person. We implement an audit trail at the database level: each transaction records who, what, when, and why. Compliance automation in this context reduces report preparation time from 2 weeks to 2 hours. Unlike custodial solutions where keys belong to a third party, our architecture gives full control and transparency.
Retention periods by data type:
| Data Type | Minimum Term | Maximum Term | Example Jurisdiction |
|---|---|---|---|
| KYC documents | 5 years | 10 years | FATF, EU |
| AML decisions | 5 years | 7 years | FATF, UK |
| Transactions | 3 years | 5 years | MiCA |
| SAR (suspicious activity reports) | 5 years | 10 years | FATF |
Cloud vs On-Premises Storage: Approach Comparison
| Criterion | Cloud (S3 + KMS) | On-Premises (NAS + HSM) |
|---|---|---|
| Deployment time | 1–2 days | 2–3 weeks |
| Scaling | Automatic | Requires hardware expansion |
| Certification | SOC2, ISO 27001 | Depends on HSM vendor |
| Cost per hour | ~$0.10/GB/month | ~$0.05/GB/month (CAPEX+OPEX) |
Cloud solutions win on speed and certification; on-premises on control. We help you choose the scenario based on jurisdiction and budget. Cloud storage deploys 10x faster than on-premises, enabling a compliance system to go live quickly. Using the cloud reduces costs by 30–50% compared to on-premises HSM.
Work Process: 4 Stages
- Analytics — audit of regulatory requirements for your jurisdiction, interviews with compliance officer.
- Design — storage schema, encryption, and retention policy. Approval from legal.
- Implementation — development of storage, integration with your KYC/AML system, unit tests.
- Test and deployment — load testing, security review, rollback plan. Deploy to your AWS/GCP.
What Is Included in the Work
- Architecture and policy documentation
- Deployment guide and operations manual
- Access to code repository (GitHub/GitLab)
- 1 month post-launch support
- Team training (2 hours)
Timelines and Cost
A typical project takes 3 to 6 weeks. Cost is calculated individually — depends on the number of data types, required fault tolerance, and local regulator requirements. Use cloud storage with KMS — it reduces costs by 30–50% compared to on-premises HSM. We'll help you find the balance between compliance and budget.
Evaluate your project — contact us. Order a compliance audit and get an implementation plan in 2 days.