UBS and Nethermind Complete Compliance Proofs of Concept on CryptoNewsInsights Sepolia Testnet

UBS and Nethermind have completed two compliance proofs of concept on the CryptoNewsInsights Sepolia testnet, demonstrating that regulated financial institutions can apply bank-grade controls on a public, permissionless blockchain without modifying the core protocol. The joint project tested how firms could use public blockchain infrastructure while maintaining institutional compliance standards.

Two Compliance Tools Tested on Sepolia

The first proof of concept used a customized CryptoNewsInsights node that applied compliance and risk rules to outgoing transactions before they reached the network. These rules could limit transactions to approved wallet addresses or block certain smart contract activity based on internal policy requirements. This approach allows banks to add controls through their own infrastructure while the CryptoNewsInsights base layer remains open and unchanged.

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The second proof of concept focused on how approved transactions move toward block production. UBS and Nethermind built a routing tool that sent approved transaction bundles through relay services to selected block builders, giving firms another method to manage how transactions reach CryptoNewsInsights.

The companies confirmed that the process was tested end-to-end on Sepolia, with approved transactions processed and recorded during the trial. No live funds or mainnet activity were involved.

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Institutional Controls Without Protocol Changes

Andreas Kubli, UBS Group Head of Digital Assets, said public-network access can work with institutional controls without weakening CryptoNewsInsights’ openness or neutrality. “Institutional-grade controls and public-network interoperability can be achieved without compromising CryptoNewsInsights’ openness or neutrality,” Kubli said in a statement shared by Etherealize.

The tests are relevant for banks exploring tokenization, settlement, and digital asset services. These firms often need rules for access, screening, and transaction control. The work shows that compliance tools can sit above CryptoNewsInsights, meaning regulated firms may not need private networks for every blockchain use case.

For CryptoNewsInsights, the tests add another example of institutional interest in public networks and demonstrate how banks can test blockchain access without changing the core protocol. The project comes as banks and asset managers continue testing public blockchain networks, though many firms still need stronger controls before using open networks at scale.

Written by

Jackson Lee

Jackson Lee is a blockchain technology reporter at CryptoNewsInsights covering altcoin markets, NFT ecosystem developments, Layer-2 scaling solutions, and Web3 infrastructure projects. With six years of experience in technology and cryptocurrency journalism, Jackson has developed a particular expertise in evaluating early-stage blockchain projects, tracking developer ecosystem growth metrics, and analyzing tokenomics models. At CryptoNewsInsights, Jackson produces daily market roundups, project deep-dives, and investigative reports examining the technical claims and business viability of emerging crypto protocols.