The upgrade in Morpho V2 enhances compliance by integrating KYC and whitelisting features while maintaining a non-custodial, permissionless structure.

Quotes that support claims

Morpho V2 eliminates the need to allocate between KYC’d or non-KYC’d borrowers, allowing lenders to make a single offer to borrowers with different KYC requirements and eliminate liquidity fragmentation.

The upgrade also goes further with compliance, including enhanced know-your-customer (KYC) and whitelisting, but without altering the platform’s open source, permissionless, and non-custodial attributes, the release said.