> For the complete documentation index, see [llms.txt](https://azoth.gitbook.io/azoth-white-paper/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://azoth.gitbook.io/azoth-white-paper/resources/editor-1.md).

# Risk & Compliance Framework

## 1. Dynamic Risk Circuit Breakers

### **Price Anomaly Detection**:

Trigger trading suspension if the price of asset tokens deviates >15% from real-world valuation (verified via Chainlink oracles).

* During suspension, only limit orders within ±3% of the oracle price are allowed.
* **Tiered Liquidation System**:

| **User Tier**       | **Margin Requirement** | **Liquidation Threshold** | **Liquidation Method**         |
| ------------------- | ---------------------- | ------------------------- | ------------------------------ |
| Retail Investors    | 120%                   | 110%                      | Dutch Auction (48-hour window) |
| Institutional Users | 150%                   | 130%                      | OTC Negotiated Liquidation     |

## **2. Compliance Transaction Engine**

* **Tiered KYC/AML Controls**:

  ```
  graph TD  
    A[User Login] --> B{Asset Type}  
    B -->|Security ABTs| C[L3 Verification: Identity + Tax Residency Proof]  
    B -->|Commodity ABTs| D[L1 Verification: Phone + Email]  
    C --> E[Dynamic Trading Limit: ≤30% of Net Worth]  
    D --> F[Daily Cap: $100,000]  
  ```
* **Jurisdictional Adaptability**:
  * Automatically block IP addresses from sanctioned regions.
  * Switch compliance rules based on user GPS location (e.g., restrict U.S. users from trading unregistered ABTs).

## **3. Insurance Fund**

* **Funding**: 5% of all ABT transaction fees are allocated to the insurance pool.
* **Payout**: Up to 90% compensation for losses caused by extreme events (e.g., asset seizures, oracle failures).

## **4. Audit & Transparency**

**On-Chain Legal Docs**: Every AZT’s legal agreements and audit reports (e.g., KPMG/PwC) are stored on IPFS, with hashes immutably recorded on-chain.

**Real-Time Monitoring**: AI-driven surveillance for suspicious trading patterns (e.g., wash trading, front-running).


---

# Agent Instructions
This documentation is published with GitBook. GitBook is the documentation platform designed so that both humans and AI agents can read, navigate, and reason over technical content effectively. Learn more at gitbook.com.

## Querying This Documentation
If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question.

Perform an HTTP GET request on the current page URL with the `ask` query parameter, and the optional `goal` query parameter:

```
GET https://azoth.gitbook.io/azoth-white-paper/resources/editor-1.md?ask=<question>&goal=<endgoal>
```

`ask` is the immediate question: it should be specific, self-contained, and written in natural language.
`goal` is optional and describes the broader end goal you are ultimately trying to accomplish on behalf of the user. GitBook uses it to tailor the answer towards what is most useful for that goal.

The response will contain a direct answer to the question and relevant excerpts and sources from the documentation.

Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.