Distributed Ledger Identity Sharing System for Virtual Asset Providers
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Solution Overview
Problem
Current blockchain technology and virtual asset service environments face difficulties in sharing user identity information between virtual asset service providers, making it challenging to verify identities and comply with anti-money laundering obligations.
Innovation Solution
A distributed ledger technology-based user identity sharing system that operates with both ON-CHAIN and OFF-CHAIN components, allowing for the registration, change, and deletion of identity information while ensuring compliance with anti-money laundering regulations by enabling de-identified identity information sharing between virtual asset service providers across different jurisdictions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If virtual asset service providers store identity information in their own isolated systems, then data security and control are improved, but information sharing and identity verification capability deteriorate
Solution Approach 1:
The system segments identity information into two distinct layers: personal identifiable information (PII) stored locally on OFF-CHAIN for security, and de-identified identity information stored on ON-CHAIN for sharing. This segmentation allows each layer to serve its specific purpose - PII remains secure while de-identified information enables verification across providers.
Solution Approach 2:
De-identified identity information acts as an intermediary between virtual asset service providers. Instead of providers directly sharing sensitive PII, they use the de-identified version as a mediator that enables identity verification without exposing personal data, thus facilitating information sharing while maintaining security.
2Ease of operation
If virtual asset service providers share identity information directly, then identity verification capability is improved, but data security and privacy protection deteriorate
Solution Approach 1:
The system extracts identifying characteristics from personal identity information to create de-identified identity information. This extraction process removes personally identifiable elements while retaining the ability to verify identity, thus enabling verification operations without exposing sensitive personal data that would create privacy risks.
Solution Approach 2:
Instead of sharing the original personal identity information, the system creates and shares a copy - the de-identified identity information. This copy contains sufficient data for verification purposes but lacks the sensitive personal elements, thus enabling ease of verification while protecting data privacy.
3Adaptability or versatility
If a unified global blockchain is used for identity management, then information sharing capability is improved, but compliance with regional data protection laws deteriorates
Solution Approach 1:
The system segments the blockchain into two distinct chains: OFF-CHAIN for regional/national operations where providers store and manage PII according to local laws, and ON-CHAIN for global operations where de-identified information is shared. This segmentation allows each chain to operate under appropriate regulatory frameworks while maintaining overall system functionality.
Solution Approach 2:
The system applies different data handling approaches to different regions and purposes: PII is managed locally on OFF-CHAIN according to regional data protection laws, while de-identified information is shared globally on ON-CHAIN. This local quality approach ensures regulatory compliance in each jurisdiction while enabling global information sharing capability.
Data Source
AI summary
Disclosed herein is a user identity sharing system utilizing a distributed ledger technology security platform. The present invention includes an OFF-CHAIN configured to operate as a regional or national blockchain within a single jurisdiction, in which one or more virtual asset service providers and one or more identity management service providers are participating; and an ON-CHAIN configured to operate as a global blockchain with no borders, in which one or more virtual asset service providers are participating, wherein user identity information of the OFF-CHAIN are shared as de-identified identity information between a virtual asset service provider participating in both the OFF-CHAIN and the ON-CHAIN and another virtual asset service provider participating in the ON-CHAIN, thus preventing forgery of user identity information, and sharing user identity information between virtual asset service providers, other blockchains, distributed ledger technology platforms, and existing IT systems.