Audit and Compliance sub-layer

Focus: Verification, reporting, and oversight. Monitoring and verification of operations against established standards.

Objective: Enable auditing and regulatory supervision. Ensure that all crosschain operations comply with set regulations, standards, and internal policies, and provide mechanisms for verification and proof of compliance.

Description: Provides tools and standards for auditing, monitoring, and demonstrating compliance across interconnected chains. Supports functions like financial reporting, regulatory disclosures, incident tracking, and compliance controls. Serves as a mechanism to monitor, log, and verify the activities within the crosschain ecosystem, ensuring they align with both internal governance policies and external regulations. This sub-layer is crucial in regulated environments where proving adherence to standards is mandatory. It involves mechanisms like activity logging, periodic audits, real-time compliance checks, and generating reports that demonstrate compliance.

Layer owner: Auditors, regulators, compliance teams

Some considerations:

• Standards for audit trails, provenance tracking across chains

• Regulator inspection interfaces and forensic access

• Cross-chain reporting and compliance dashboards

• Controls for data lineage, retention, archiving

• Standards for interoperability risk management

• Certification programs for cross-chain compliance

• Automated compliance checks and controls