On November 28, a news portal Cointelegraph reported that a patent has been awarded to major American cryptocurrency exchange which is Coinbase. It is a system that identifies and flags non-compliant accounts.
This firm previously on November 19 was joining a filling with the U.S. Patent and Trademark Office to details a system containing a scoring model. Which is “determining a compliance score for each of the accounts based on the respective factors associated with the account.”
Eradicate accounts which were not compliant
A non-compliant accounts identified by the system will be evaluated whether it is good or bad. This account will then enter a determination into the feedback system and decide whether or not to close the account.
“An investigator may be able to determine whether an account is being used for illicit activities by doing research on the parties of the transaction who receive or send payment. Also determining whether such parties are regularly involved in illicit activities. It may for example be relatively easy to determine that a party sending or receiving payment is in the business of conducting online services that may be illegal,” Stated in the filling.
In addition, in 2019 there was $4.4 billion total amount losses from cryptocurrency-related fraud and theft. CipherTrace released this report for the third quarter of that year. CipherTrace has explored the 120 most popular cryptocurrency exchanges Know Your Customer (KYC) and Anti-Money Laundering compliance requirements..Also, analyzed patterns in crypto-related crimes.
Jake Chervinsky, a lawyer and general counsel at decentralized finance startup Compound Finance earlier in November raised the question of whether exposing the public to data risks that KYC requirements entail is worth it. He noted that KYC helps law enforcement monitor fraudulent transactions, but also introduces the public to hacking, phishing and identity theft.
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