Monitoring and auditing tool based on block chain financial payment and settlement

Abstract

The invention discloses a monitoring and auditing tool based on block chain financial payment and liquidation. The tool comprises a verification center used for managing, verifying and querying transactions, and a certificate authorization module. A verification center is provided as a centralized monitoring and auditing tool for block chain financial payment and settlement, and the supervision vulnerability of a block chain decentralization system is made up; the verification center serves as an international compliance data center and shares risk information with a global supervision mechanism.

Description

Technical Field

[0001] This invention relates to a blockchain-based financial payment clearing monitoring and auditing tool. Background Technology

[0002] Since 1973, the Society for Worldwide Interbank Financial Telecommunication (SWIFT) has been a mainstay of global cross-border transactions. It operates as a messaging network, enabling financial institutions to securely transmit payment instructions. However, SWIFT does not directly process fund transfers; instead, it relies on a network of correspondent banks for transaction settlement. This process introduces multiple intermediaries, leading to delays (typically 1-5 days), increased costs (including intermediary fees and foreign exchange), and a lack of transparency in transaction tracking. While SWIFT's standardized messaging (MT / MX format) ensures interoperability, its centralized architecture and legacy infrastructure are inefficient in today's demands for instant, low-cost transactions.

[0003] Blockchain technology is a decentralized ledger system that overcomes the limitations of SWIFT (Society for Worldwide Interbank Financial Telecommunication), bringing transformative potential to clearing and settlement, and possessing the following characteristics: • Decentralization: Transactions do not rely on traditional financial institutions (such as banks), but are verified by a decentralized network of nodes, thereby eliminating centralized regulation.

[0004] The Paradox of Transparency and Anonymity: Transaction records are publicly accessible, but the addresses are not directly associated with real-world identities, thus creating "anonymity."

[0005] • Unalterable: Data on a blockchain cannot be altered once recorded. However, this also makes it technically impossible to reverse illicit transactions, such as money laundering.

[0006] However, applying blockchain technology to the field of virtual currency will face the following challenges: 1. Risks of Anonymous Abuse and Money Laundering 2. Cross-border transactions and regulatory arbitrage • Global instant settlement: Virtual currencies can be transferred instantly across jurisdictions (e.g., via cross-chain bridges), thereby circumventing local regulations.

[0007] • Fragmented supervision: Differences in the regulations governing different virtual currencies (e.g., U.S. assets versus EU financial instruments) have hindered international harmonization.

[0008] 3. DeFi (Decentralized Finance) faces compliance challenges. • Lack of accountability: Decentralized protocols lack a centralized entity to perform AML obligations, such as the FATF Travel Rule regulatory requirement.

[0009] • Flash loan vulnerabilities: Attacks exploiting smart contract vulnerabilities (e.g., the 2022 Beanstalk hack worth $182 million) highlight the risks of automated systems.

[0010] Therefore, the core technical features of virtual currencies: decentralization, cryptographic privacy, and smart contracts, are both the driving force of innovation and the root of regulatory complexity. However, it is necessary to take effective regulatory measures to fill the regulatory gap of "decentralization", balance privacy and transparency, and reduce the risk of smart contracts. SUMMARY

[0011] In view of the above defects of the prior art, the present application provides a blockchain-based financial payment clearing monitoring and auditing tool, and the specific solutions are as follows.

[0012] A monitoring and auditing tool for blockchain-based financial payment clearing, comprising: A verification center responsible for managing, verifying, and querying transactions processed by the blockchain-based financial payment and clearing service system; A certificate authorization module responsible for issuing and verifying trust certificates for parties using or deploying the blockchain clearing and settlement service system; Embedding at least transaction information for transaction purposes into a designated stable currency to achieve the transfer of fiat currency value and the control of risk information; KYC / KYB transaction information and transaction purpose proof are collected and saved by the initiator and receiver, and authenticated by the certificate authorization module; The verification center monitors all transactions conducted through the blockchain-based financial payment and clearing service system; when initiating STR, the verification center requires the initiator and receiver to provide KYC / KYB and transaction purpose proof, verifies the transaction risk, and saves the risk record.

[0013] Further, the certificate issuing agency issues trust certificates trusted by the authorization module for trusted financial institutions, web3 wallet providers, and other third parties.

[0014] Further, a risk center is also provided, which communicates with the verification center; the risk center takes over the STR processing flow and feeds back the risk record to the verification center.

[0015] Further, the initiator and receiver can query the verification center for risk records to assess the risk of subsequent transactions.

[0016] Further, the trust credentials grant corresponding parties respective permissions to access transaction information and risk records.

[0017] Further, the parties holding the trust credentials are divided into two categories: the first category, financial institutions and Web3 wallet providers, are users of the blockchain-based payment and clearing service system and have the permission to review the initiated transaction records; the second category, regulatory authorities, have the permission to review the transaction itself and risk records.

[0018] Further, the parties holding the trust credentials also include: The third category, observers, are responsible for supervising the operation of the blockchain-based payment and clearing service system and the verification center, have the right to review all transaction records and risk records, and make regulatory recommendations.

[0019] Further, the transaction information also contains a field indicating whether the initiator and the recipient have collected KYC / KYB.

[0020] Further, the STR includes the following fields: reporting agency, transaction client information, transaction information, suspicious transaction report description, and crime report.

[0021] The beneficial effects of the present application are: by setting up a verification center as a centralized monitoring and auditing center for blockchain-based financial payment clearing, the regulatory loopholes in the decentralized system of the blockchain are filled. The transaction information deployed to the blockchain ledger is similar to ordinary virtual currency, such as transaction hash, initiator address, recipient address, transaction amount, digital signature, etc. The transaction purpose information is additional transaction information added to the blockchain ledger to meet regulatory requirements. Therefore, private information such as KYC / KYB and transaction purpose proof documents will not be disclosed in the blockchain ledger, thus maintaining the anonymity of the blockchain. Each party participating in the blockchain-based financial payment clearing service system must be authenticated by trust credentials before they can process transactions and deploy transaction information (such as initiator address, recipient address, and digital signature) so that the verification center can track every transaction on the blockchain. Trust parties must keep KYC / KYB and transaction purpose proof documents within the institution to be subject to regulatory monitoring and auditing. Upon receiving a suspicious transaction report (STR) or a request from a regulatory authority, the initiator and recipient must transmit KYC / KYB information and transaction purpose proof to the verification center to verify transaction risks and save risk records. The verification center, as an international compliance data center, shares risk intelligence (such as suspicious transaction patterns) with global regulatory authorities. BRIEF DESCRIPTION OF DRAWINGS

[0022] The present application will be described in detail below with reference to the accompanying drawings.

[0023] Figure 1 The system architecture diagram of the present application. DETAILED DESCRIPTION

[0024] Reference Figure 1 A monitoring and auditing tool for blockchain-based financial payment and clearing, comprising: A verification center responsible for managing, verifying and querying transactions processed by the blockchain-based financial payment and clearing service system; A certificate authorization module responsible for issuing and verifying trust certificates of parties using or deploying the blockchain clearing and settlement service system; Embedding at least transaction information for transaction purposes into a designated stable currency to achieve the transfer of legal currency value and the control of risk information; KYC / KYB transaction information and transaction purpose proof collected and saved by the initiator and receiver, and authenticated by the certificate authorization module; The verification center monitors all transactions conducted through the blockchain-based financial payment and clearing service system; when initiating STR, the verification center requires the initiator and receiver to provide KYC / KYB and transaction purpose proof, verifies the transaction risk, and saves the risk record.

[0025] The verification center is set up and serves as a centralized center to monitor and audit the blockchain-based financial payment and clearing to make up for the regulatory loopholes in the decentralized blockchain system. The transaction information is deployed to the blockchain ledger similar to ordinary virtual currency, such as transaction hash, initiator address, receiver address, transaction amount, digital signature, etc. The purpose information in the transaction is additional transaction information added to the blockchain ledger to meet regulatory requirements. Therefore, KYC / KYB and transaction purpose-related proof and other private information will not be disclosed in the blockchain ledger to maintain the anonymity of the blockchain. Parties participating in the blockchain-based financial payment and clearing service system must be verified for trust through trust certificates to process transactions and deploy transaction information (such as initiator address, receiver address and digital signature) so that the verification center can track every transaction on the blockchain. Trust parties must save KYC / KYB and transaction purpose-related proof in-house to be subject to regulatory monitoring and auditing. Once a suspicious transaction report (STR) or regulatory agency request is received, the initiator and receiver must transmit KYC / KYB information and transaction purpose-related proof to the verification center to verify the transaction risk and save the risk record. The verification center serves as an international compliance information center and shares risk intelligence (such as suspicious transaction patterns) with global regulatory agencies.

[0026] In order to monitor and audit each transaction of the blockchain-based financial payment and clearing service system, the transaction can only be initiated and received by a trusted party to control the risk. In order to verify the identity of the trusted party, the credential authorization module will manage all the credentials used by all trusted parties. It can issue credentials to trusted parties or manage credentials issued by trusted parties. These trusted parties must be trusted institutions, such as financial institutions (banks, securities companies, insurance companies, investment companies, trust companies, etc.), Web3 wallet providers (cryptocurrency exchanges), financial regulatory authorities, etc.

[0027] A risk center is set up to monitor and audit all transactions on the blockchain and communicate with the verification center, take over the STR processing flow, and feed back the risk records to the verification center to control the risk transactions.

[0028] According to the anti-money laundering laws and regulations of some countries, the transaction and transfer of digital assets are subject to anti-money laundering laws. The relevant provisions are as follows: • KYC requirements for both parties of on-chain transactions • On-chain transaction requirements for recording fields for specific transfers • Suspicious transaction reporting requirements for on-chain transactions Therefore, the fields and information that need to be collected are as follows: KYC form

[0029] KYB form

[0030] Board information form

[0031] Ultimate beneficial owner information

[0032] Shareholder and equity structure

[0033] Bank account information

[0034] Business certification documents

[0035] Other proof documents

[0036] Fields for initiating transfers (AML Travel Rule)

[0037] STR table

Claims

1. A monitoring and auditing tool for blockchain-based financial payment clearing, characterized in that, The application comprises: a verification center responsible for managing, verifying and querying transactions processed by the blockchain-based financial payment and clearing service system; a certificate authorization module responsible for issuing and verifying trust certificates of parties using or deploying the blockchain clearing and settlement service system; embedding at least transaction information for transaction purposes into a designated stable currency to achieve the transfer of legal currency value and the control of risk information; KYC / KYB transaction information and transaction purpose certificates are collected and saved by the initiator and the recipient, and are authenticated by the certificate authorization module; The verification center monitors all transactions conducted through the blockchain-based financial payment and clearing service system; when initiating STR, the verification center requires the initiator and the recipient to provide KYC / KYB and transaction purpose certificates, verifies the risk of the transaction, and saves the risk record. 2.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 1, wherein: The certificate issuing agency is a trusted financial institution, web3 wallet provider and other third parties that issue trust certificates trusted by the authorization module. 3.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 1, wherein: A risk center is also provided, which communicates with the verification center; the risk center takes over the STR processing flow and feeds back the risk record to the verification center. 4.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 1, wherein: The initiator and the recipient can query the verification center for risk records to assess the risk of subsequent transactions. 5.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 1, wherein: The trust certificate gives the relevant parties the corresponding rights to access transaction information and risk records. 6.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 1, characterized in that: The parties holding the trust certificate are divided into: First category: financial institutions and Web3 wallet providers, which are users of the blockchain-based payment and clearing service system and have the right to review the records of initiated transactions; 7.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 6, characterized in that: Second category: regulatory authorities, which have the right to review transactions and risk records. The parties holding the trust certificate also include: 8.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 6, characterized in that: Third category: observers responsible for supervising the operation of the blockchain-based payment and clearing service system and the verification center, have the right to review all transaction records and risk records, and make regulatory recommendations. 9.The monitoring and auditing tool for blockchain-based financial payment clearing according to claim 6, characterized in that: The transaction information also contains a field indicating whether the initiator and the recipient have collected KYC / KYB. STR includes the following fields: Reporting agencies, transaction client information, transaction information, suspicious transaction report description and crime report.

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