Onboarding an Institution for Crypto Brokerage

Create an Institution Identity, Account and Profile to provide Buy, Hold and Sell Crypto Brokerage for Institutions

This guide walks through setting up a Fiat and Crypto Subledger crypto brokerage integration for institutions, creating an Institution Identity and a related Account and Profile to book orders using the Order API. First, we will create an Identity to represent the institution’s KYC information on the Paxos Platform. Then we will create an Account which sets up the structure of the brokerage account. Then we will create a Profile that represents the institution’s fiat and crypto asset holdings. Then we will integrate with the Order API to set up a simple Buy, Hold and Sell integration. This guide should take around 30 minutes.

Prerequisites

• Sign up to the Paxos Dashboard in Sandbox
• Reach out to Support to provision access to the Identity API

Authenticate in Sandbox

Create an API Key on the Sandbox Paxos Dashboard with the following scopes to access the Identity, Account and Order APIs needed for this guide

• identity:read_identity
• identity:read_account
• identity:write_identity
• identity:write_account
• funding:read_profile
• funding:write_profile
• exchange:read_order
• exchange:write_order

Run below to get the access_token from OAuth:

curl --location 'https://oauth.sandbox.paxos.com/oauth2/token' \
--form grant_type=client_credentials \
--form client_id={paxos_client_id} \
--form client_secret={paxos_secret} \
--form scope='identity:read_identity identity:read_account identity:write_identity identity:write_account funding:read_profile funding:write_profile exchange:read_order exchange:write_order'

Confirm the response includes requisite scopes and save the access_token to use in the request authorization header throughout this guide.

{
 "access_token": "{access_token}",
 "expires_in": 3599,
 "scope": "identity:read_identity identity:read_account identity:write_identity identity:write_account funding:read_profile funding:write_profile exchange:read_order exchange:write_order",
 "token_type": "bearer"
}

Include the Authorization header with the bearer token on all API requests -H "Authorization: Bearer $TOKEN".

Creating an Institution Identity and Account

Institution identities are used to represent all non-person entities. Details for institution identity type are recorded in institution_details. An institution identity also has institution_members associated with it. This defines persons or other entities that have some relationship to the institution.

For detailed information about institution types, subtypes, and required fields, please refer to the Institution Required Details documentation.

➊ Creating Person Identities for Institution Members

Before creating an institution identity, you need to create person identities that will be associated with the institution as members (e.g. beneficial owners, authorized users, management control persons, etc.). You’ll need to create at least one person identity, but typically you’ll create multiple identities for different roles within the institution.

The required fields for each institution member role are different. Please reach out to Support for more information.

# Create a person identity
curl --location "https://api.sandbox.paxos.com/v2/identity/identities" \
--header "Authorization: Bearer {access_token}" \
--header "Content-Type: application/json" \
--data '{
  "ref_id": "{your_end_user_ref_id}",
  "person_details": {
    "verifier_type": "PASSTHROUGH",
    "passthrough_verifier_type": "JUMIO",
    "passthrough_verified_at": "2021-06-16T09:28:14Z",
    "passthrough_verification_id": "775300ef-4edb-47b9-8ec4-f45fe3cbf41f",
    "passthrough_verification_status": "APPROVED",
    "passthrough_verification_fields": ["FULL_LEGAL_NAME", "DATE_OF_BIRTH"],
    "first_name": "Billy",
    "last_name": "Duncan",
    "date_of_birth": "1980-01-01",
    "nationality": "USA",
    "address": {
      "address1": "123 Main St",
      "city": "New York",
      "province": "NY",
      "country": "USA",
      "zip_code": "10001"
    },
    "cip_id": "073-05-1127",
    "cip_id_type": "SSN",
    "cip_id_country": "USA",
    "phone_number": "[phone]",
    "email": "[e-mail]"
  },
  "customer_due_diligence": {
    "estimated_yearly_income": "INCOME_50K_TO_100K",
    "expected_transfer_value": "TRANSFER_VALUE_25K_TO_50K",
    "source_of_wealth": "EMPLOYMENT_INCOME",
    "employment_status": "FULL_TIME",
    "employment_industry_sector": "ARTS_ENTERTAINMENT_RECREATION"
  }
}'

Check the response to find the identity_id of the newly created person identity. You’ll need this ID when creating the institution identity.

{
  "id": "{person_identity_id}",
  "status": "PENDING",
  "created_at": "2021-06-16T09:28:14Z",
  "updated_at": "2021-06-16T09:28:14Z",
  "ref_id": "{your_end_user_ref_id}",
  "person_details": {
    // ...
  }
}

➋ Creating an Institution Identity

To create an institution identity, you’ll need to provide:

• The details of the institution according to the Institution Required Details
• Information about institution members and their roles

Here’s an example of creating a institution (see API documentation for full request details):

# Example API call to create an institution identity
curl --location "https://api.sandbox.paxos.com/v2/identity/identities" \
--header "Authorization: Bearer {access_token}" \
--header "Content-Type: application/json" \
--data '{
  "institution_members": [
    {
      "identity_id": "{person_identity_id}",
      "roles": ["BENEFICIAL_OWNER", "AUTHORIZED_USER", "MANAGEMENT_CONTROL_PERSON"]
    }
  ],
  "institution_details": {
    "name": "Foogle",
    "business_address": {
      "country": "United States",
      "address1": "1 Example St",
      "city": "New York",
      "province": "NY",
      "zip_code": "10001"
    },
    "email": "[e-mail]",
    "institution_type": "CORPORATION",
    "institution_sub_type": "HEDGE_FUND",
    "cip_id": "12-3456789",
    "cip_id_type": "EIN",
    "cip_id_country": "USA",
    "govt_registration_date": "2021-04-14T00:00:00Z",
    "incorporation_address": {
      "country": "United States",
      "address1": "1 Example St",
      "city": "New York",
      "province": "NY",
      "zip_code": "10001"
    },
    "regulation_status": "US_REGULATED",
    "trading_type": "PUBLIC",
    "listed_exchange": "NASDAQ",
    "ticker_symbol": "FOOG",
    "regulator_name": "SEC",
    "regulator_jurisdiction": "USA",
    "regulator_register_number": "12-3456789",
    "business_description": "Foo"
  },
  "ref_id": "{your_inst_end_user_ref_id}"
}'

The above example is a simplified version. For production use, you’ll need to provide additional details based on your institution type. Refer to the Institution Required Details documentation for complete requirements.

The cip_id of an Identity is required to be unique. If a 409 duplicate cip_id error occurs, handle it by either:

• Refusing to support crypto brokerage services for institutions that have a duplicate cip_id
• If they are confirmed to be the same Identity, create a new Account to represent each institution account.

Check the response to find the identity_id of the newly created Identity and notice the status of the Identity is PENDING. Paxos will make an Onboarding Decision and asynchronously update the status to either DENIED or APPROVED.

{
    "id": "{institution_identity_id}",
    "status": "PENDING",
    "created_at": "2021-06-16T09:28:14Z",
    "updated_at": "2021-06-16T09:28:14Z",
    "ref_id": "{your_inst_end_user_ref_id}",
    "institution_details": {
        // ...
    }
}

An Identity might stay in PENDING due to being deemed high risk by Paxos. This Identity will be required to undergo Enhanced Due Diligence. See how to automate document collection to allow HIGH risk customers to onboard to Paxos.

➌ Wait for the Identity to be Approved

You’ll need to reach out to Support as by default the institution will be stuck in PENDING due to waiting for document verification, depending on your integration type document verification may not be required - but it is by default.

You can check the status of the institution identity by calling the Get Identity endpoint:

# Check identity status
curl --location "https://api.sandbox.paxos.com/v2/identity/identities/{institution_identity_id}" \
--header "Authorization: Bearer {access_token}"

• Use a Webhook integration to asynchronously process identity.approved and identity.denied events to notify users when they have been onboarded to Paxos.

➍ Creating an Account and Profile

Now we are ready to make an Account and Profile for the institution Identity. An Account logically relates to an institution’s brokerage account, an Identity therefore can have one or many Accounts.

# Create account and profile
curl --location "https://api.sandbox.paxos.com/v2/identity/accounts" \
--header "Authorization: Bearer {access_token}" \
--header "Content-Type: application/json" \
--data '{
  "create_profile": true,
  "account": {
    "identity_id": "{institution_identity_id}",
    "name": "Institution Brokerage Account",
    "type": "CRYPTO_BROKERAGE"
  }
}'

When you create an account, a profile is automatically created and associated with it. You’ll need the profile ID to book orders, so you should retrieve it after creating the account:

# Get the profile ID associated with the account
curl --location "https://api.sandbox.paxos.com/v2/profiles?account_id={account_id}" \
--header "Authorization: Bearer {access_token}"

Booking an Order

We will use the Order API to create buy and sell orders. We recommend also taking a look at the FIX and WebSocket solutions and using the best combination of APIs for the specific use case.

➊ Fund the Account

In a complete integration, follow the Fiat Transfers Funding Flow guide to learn how to fund institution assets using a Fiat Deposit.

For this guide, we will use the sandbox-only Test Funds feature in Dashboard to fund the Identity with $10,000 USD. First, navigate to the Dashboard Landing Page and locate the Fund button.

Then select the Profile related to the Account created and fund for $10,000 USD

➋ Creating an Order

To book an order, specify the profile_id which is linked to the account_id created above (if one exists, else the omnibus profile_id).

Buy

curl --location "https://api.sandbox.paxos.com/v2/profiles/{profile_id}/orders" \
--request "POST" \
--header "Authorization: Bearer {access_token}" \
--data '{
    "side": "BUY",
    "market": "ETHUSD",
    "type": "LIMIT",
    "price": "1814.8",
    "base_amount": "1",
    "identity_id": "{institution_identity_id}",
    "identity_account_id": "{account_id}"
}'

Sell

curl --location "https://api.sandbox.paxos.com/v2/profiles/{profile_id}/orders" \
--request "POST" \
--header "Authorization: Bearer {access_token}" \
--data '{
    "side": "SELL",
    "market": "ETHUSD",
    "type": "LIMIT",
    "price": "1804.2",
    "base_amount": "1",
    "identity_id": "{institution_identity_id}",
    "identity_account_id": "{account_id}"
}'

You can check the status of the order by calling

curl --location "https://api.sandbox.paxos.com/v2/profiles/{profile_id}/orders/{order_id}" \
--request "GET" \
--header "Authorization: Bearer {access_token}"

And that is it, congratulations on completing your first end-to-end crypto brokerage integration for institutions with Paxos!