Crypto Asset Transfer API with Segmented KYC Tokens
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Solution Overview
Problem
The integration of cryptocurrency services with traditional financial systems is hindered by the volatility of cryptocurrencies and the challenge of implementing Know Your Customer (KYC) protocols in decentralized networks.
Innovation Solution
A system that uses a digital wallet to store transaction data from both fiat and crypto accounts, identifies historical usage patterns, and creates a security token with embedded KYC data, which is verified through a blockchain consensus process and committed to a blockchain ledger.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If KYC verification is implemented in decentralized crypto networks, then security and compliance are improved, but user anonymity and system decentralization are compromised
Solution Approach 1:
The system segments KYC verification data into discrete tokens that can be selectively presented. Instead of requiring complete identity disclosure for all transactions, the system divides verification into modular security tokens that contain specific verification attributes, allowing users to provide only the necessary proof for each transaction type while maintaining other aspects of anonymity.
Solution Approach 2:
The patent introduces blockchain-based security tokens as an intermediary between KYC verification requirements and user anonymity. These tokens act as a mediator that proves verification compliance without directly exposing personal identity information, enabling third parties to verify KYC status without accessing underlying sensitive data.
2Adaptability or versatility
If cryptocurrency services are integrated with traditional financial systems, then payment options and service versatility are improved, but volatility and fraud risks increase
Solution Approach 1:
The system performs KYC verification and security assessment in advance, before cryptocurrency transactions are executed. By pre-verifying user identities and creating security tokens beforehand, the system establishes a foundation of trust that mitigates fraud risks during actual transactions, allowing secure integration with traditional financial systems.
Solution Approach 2:
The system implements continuous monitoring and verification mechanisms that provide feedback on transaction security. Blockchain-based security tokens enable real-time verification of KYC compliance, allowing the system to dynamically assess and respond to security conditions, thereby managing volatility and fraud risks while maintaining service versatility.
3Measurement precision
If historical usage characteristics are embedded in security tokens, then KYC verification accuracy is improved, but data storage requirements and system complexity increase
Solution Approach 1:
Instead of storing complete historical usage data, the system creates simplified copies or representations of verification characteristics within security tokens. These tokens contain essential verification attributes derived from historical data, providing sufficient accuracy for KYC purposes without requiring storage or processing of the entire historical dataset, thereby reducing system complexity.
Data Source
AI summary
An example operation may include one or more of storing transaction content from transactions executed via one or more fiat payment accounts and one or more crypto accounts of a digital wallet of a user, and determining, via execution of a machine learning model on the stored transaction content, a recurring expense value of the user and a next point in time in which the recurring expense value, dividing the recurring expense value into a plurality of sub-values; generating a plurality of transactions which transfer the plurality of sub-values from a fiat payment account to a crypto account from among the one or more crypto accounts and store the plurality of transactions within a queue, initiating a plurality of time-to-live jobs for the plurality of transactions, respectively, wherein the plurality of time-to-live jobs comprise a plurality of different respective expiration times that are staggered such that the plurality of time-to live jobs expire in incremental intervals from a current time to the next point in time in which the recurring expense value is due and executing the plurality of transactions at the plurality of different expiration times to incrementally transfer the plurality of sub-values from the fiat account to a crypt account via an application programming interface (API).