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Retroactive Flagging

Traditional compliance systems operate on a pass/fail basis at the time of a transaction. Bermuda goes further with retroactive flagging — the ability to identify and flag transactions after they have already been processed, based on new intelligence.

How It Works​

When a previously unknown address is later added to a sanctions list or flagged by a compliance provider, Bermuda's compliance layer can:

  1. Identify affected transactions — Trace which shielded transactions involved the flagged address
  2. Flag retroactively — Mark those transactions for review without disrupting the rest of the pool
  3. Notify compliance officers — Alert integrators and operators about the flagged activity

This happens without compromising the privacy of unrelated users. Only transactions associated with the flagged entity are surfaced.

Why It Matters​

Threat intelligence is not static. Addresses that appear clean today may be flagged tomorrow based on:

  • Updated sanctions lists (OFAC, EU, UN)
  • Law enforcement investigations
  • New on-chain forensic analysis
  • Cross-chain intelligence sharing

Retroactive flagging ensures that Bermuda's privacy layer can respond to evolving threats — not just the ones known at the time of deposit.

Key Properties​

  • Non-invasive — Flagging does not require surveillance of all users; only flagged entities are affected
  • Auditable — Flagged transactions create a compliance trail for regulators and auditors
  • Configurable — Integrators define which intelligence feeds and update frequencies to use
  • Privacy-preserving — The flagging process does not reveal information about unflagged users or their transactions