Cryptocurrency exchange Coinbase has patented a self-learning compliance enforcer that shutters "Bad" user accounts.
The U.S Patent and Trademark Office-issued patent, published on Nov. 19, describes an automated system and accompanying scoring mechanism that together root out non-compliant user accounts - specifically ones suspected of trafficking in illegal activity.
It assigns an overall compliance score from a variety of factors, according to the patent description.
Some are user-inputted or executed data points, including user age, account balance, transaction volume, location, verification history and the number of devices with access.
The compliance enforcer also measures "The level of due diligence that has been performed on the respective account," and any past history of compliance review in determining "Whether the account is bad or good."
Bad ones are suspended and referred to law enforcement authorities if the transaction involves more than $2,000, the patent indicates.
Investigators have an override function allowing them to bypass the suspensions, according to the patent.
The system learns to differentiate from a training set.
It constantly updates its compliance model from the data collected and the accounts flagged.
While it is unclear whether Coinbase intends to ever implement such a system, the exchange has a strict set of know-your-customer and anti-money laundering policies meant to help it abide by U.S. and international laws, which this system could be designed to aid in.
Coinbase Patents Automated KYC Enforcement Tool
gepubliceerd op Nov 28, 2019
by Coindesk | gepubliceerd op Coinage
Coinage
Recent nieuws
Alles zien
Blockchain Bites: Bitcoin's Run, Uniswap's Hemorrhaging Value, Anchorage's Banking Bid
Bitcoin is nearing all-time highs in price and market cap last set three years ago.
Japan's megabanks to lead experiment with digital yen
We have, in order, Cheese Bank with a $3.3 million theft, Akropolis with its $2 million loss, Value DeFi with a whopping $6 million exploit and finally Origin Protocol's loss of $7 million.
Number of new Bitcoin addresses spikes amid growing FOMO
Japan's three largest banks, as part of a group of 30 private sector actors, are set to collaborate on an experiment with a digital yen.
Not just Wall Street: Quant trader explains why Bitcoin price is going up
Sam Trabucco, a quantitative trader at Alameda Research, believes four general factors are pushing up the price of Bitcoin.