Selective Disclosure & Compliance

Overview

"Private" and "compliant" are not opposites. eERC is built for selective disclosure: confidentiality for everyone by default, with controlled, authorized visibility for an auditor — without weakening privacy for non-audited flows. This skill is the design layer over [[eerc-auditor-compliance]].

Mechanisms

1. Auditor selective decryption. Every operation encodes an auditor PCT, so a designated auditor can decrypt history via auditorDecrypt(). Only the auditor can; other users still see nothing ([[eerc-auditor-compliance]]).
2. Per-user disclosure. A user can reveal their own balance/history by sharing decrypted values (or proofs of them) — they hold the decryption key ([[eerc-key-management]]).
3. Rotatable auditors. Change the auditor without redeploying; rotation is forward-looking.
4. Encrypted metadata for audit context. Attach invoice/reference data decryptable by the counterparty and auditor ([[eerc-encrypted-metadata]]).

Designing a compliance model

• Decide the auditor scope. Whole-contract auditor vs designated per-deployment. Document who holds the key and why.
• Minimize disclosure. Disclose to the auditor only; avoid making data public. Default to confidentiality.
• Data handling. Define retention/processing of decrypted data per jurisdiction (KYC/AML).
• On a private L1, combine with participant gating (KYC at the allowlist) for a defense-in-depth, regulator-friendly setup ([[combining-eerc-with-private-l1]], [[evergreen-institutional]]).

Privacy/compliance trade-off matrix

Need	Approach
Regulator can audit all flows	contract auditor key
User proves solvency/balance to a third party	user-side disclosure of decrypted balance
KYC'd participants only	private L1 allowlists ([[l1-transaction-allowlist]])
Confidential references for reconciliation	encrypted metadata

Common Pitfalls

• All-or-nothing thinking. You don't have to make data public to be compliant — use the auditor channel.
• Over-disclosure. Granting broad access "to be safe" erodes the whole point.
• Assuming rotation re-grants history. It doesn't ([[eerc-key-management]]).

AI Agent Prompt

"Act as a compliance architect. Design a selective-disclosure model for my eERC deployment: who audits, what they can decrypt, how users self-disclose, and how it maps to my KYC/AML obligations without making data public."

References

See references/README.md (academy compliance + auditability, EncryptedERC AuditorManager).