Beneficiary compliance review

How Trace FX reviews the parties a marketplace pays out to, and what the marketplace must still do on its side.

Overview

Beneficiaries are the end-users your platform pays out to. They are not Trace’s direct customers — you are — but Trace’s banking and crypto rails are what move funds on their behalf, so each beneficiary goes through a compliance review tuned to the rail used.

This review is separate from KYC/KYB — KYC/KYB applies to your account ownership and your UBOs (see KYC and KYB requirements). The beneficiary review described here happens at instruction creation, not at account onboarding.

What you submit per beneficiary

Submitted on POST /api/beneficiaries:

Field	Format	Notes
holder.type	enum	INDIVIDUAL or COMPANY.
holder.firstName / lastName	string	Required when type = INDIVIDUAL.
holder.legalName	string	Required when type = COMPANY.
holder.tradeName	string	Optional.
holder.taxId.value / taxId.type	string / enum	CPF/CNPJ for Brazilian beneficiaries; foreign tax ID otherwise.
holder.dateOfBirth	yyyy-MM-dd	Required when type = INDIVIDUAL.
holder.address	object	Residential or registered address.
relationshipType	enum	SELF_OWNED or THIRD_PARTY.
paymentInstruction	object	Rail-specific (PIX dict key, crypto wallet, etc.).

The data shape is identity-equivalent to a KYC submission, but documents and UBO chains are not currently accepted on beneficiary submissions.

What Trace reviews

When a payment instruction is created, Trace runs an automated review tuned to the rail. The exact check set is:

• Identity screening on holder.taxId, holder.firstName + lastName (or legalName), and holder.address.country against sanctions and PEP lists.
• Payment-instrument verification matched to the rail:
  • PIX — the dict key must resolve in the PIX directory before the instruction is accepted as approved.
  • Crypto — the wallet address is recorded; deeper screening described below.

The instruction transitions from PENDING_REVIEW to either APPROVED or REJECTED once the review completes. Subscribe to the BENEFICIARY_PAYMENT_INSTRUCTION_APPROVED and BENEFICIARY_PAYMENT_INSTRUCTION_REJECTED webhooks to track the outcome (see the withdrawal journey for the full flow).

What the marketplace still owns

The beneficiary review at Trace does not relieve you of your own KYC obligations on your end-users. Specifically, you are expected to:

• Verify the identity of every end-user before they receive payouts through Trace.
• Maintain your own KYC files (identity documents, address proof, source-of-funds where applicable) in line with the regulators that apply to your business.
• Ensure the data submitted to Trace per beneficiary is accurate and up to date.
• Apply your own internal limits and risk-tiers; Trace’s review is the rail-side gate, not a substitute for your platform’s customer-due-diligence program.

If your business operates under a regulated regime that requires Trace to participate in the customer review (for example, certain BaaS arrangements), reach out to Trace’s compliance team — those arrangements are negotiated separately.

Statuses you will observe

A payment instruction goes through:

• PENDING_REVIEW — submitted, awaiting Trace’s automated checks.
• APPROVED — checks passed; usable for withdrawals.
• REJECTED — checks failed; not usable. The webhook payload includes a currentState.reason describing why.

PENDING_REVIEW typically resolves within seconds. Withdrawals can only reference APPROVED instructions.

Related

• KYC and KYB requirements — owner-side review, separate from this one.
• Withdraw — end-to-end payout flow, including the review’s place in the lifecycle.
• Webhooks — BENEFICIARY_PAYMENT_INSTRUCTION_* events.