Topic: [2017-09-26] Patent Filling Suggests Bitcoin Exchanges may be Monitored (Read 1974 times)

A new invention patent has been filed by FICO. The invention is a tool that will allow FICO, government, and others to collect financial data from Bitcoin exchanges. The tool is designed to support AML and KYC regulations. The patent is called “Advanced Learning System for Detection and Prevention of Money Laundering.”


The patent filing suggested the product was created to curb fraud. Government offices intend to collect data from exchanges to catch criminals and others. They want to “centralize” all the information. The patent filing elaborated:

        "KYC on-boarding and customer updates can include questions on such topics, as well as from public records and regulators. While it may be difficult to get timely information on illicit Bitcoin sources, it is important to collect and centralize information on legal exchanges and administrators (miners, etc.). Regulations now require that certain entities associated with BitCoin be classified as “money services businesses” (MSBs) and must comply with appropriate regulations, such as the Bank Secrecy Act."


The product’s intended purpose is making sure entities comply with regulations by collecting data from the cloud. The patent filing suggests that the AML threat score can be deployed from various servers. This allows agencies to track data from multiple institutions.

The patent filing continued, “This allows the predictive model to have access to SAR information and other risk factors from a variety of institutions that are members of the AML Consortium. The predictive model can therefore have access to a wider view of risk information than would be possible when viewing only transactions and customer information from a single institution.”


Besides this new data-collection tool, the IRS has attempted to collect data directly from bitcoiners. There is still an ongoing legal battle between Coinbase and the IRS. In this sense, there seems to be a large push from various sources to centralize and analyze bitcoin data. However, Coinbase has not caved into IRS demands. They are trying to push back against initiatives to acquire financial and security information from users.

Fraud is government’s main concern, but tax evaders also seem to be on their radar. It will be interesting to see how the battle of centralization of data versus decentralization of data unfolds in the future.

https://news.bitcoin.com/bitcoin-exchanges-may-be-monitored-for-fraud/