Payment Network Authentication for Rapid Cryptocurrency Exchange Onboarding

Resolve Bottlenecks,
Find Innovative SolutionsGenerate Solutions

Solution Overview

Problem

Existing cryptocurrency exchange authentication protocols are cumbersome and time-consuming, often requiring users to provide sensitive identification documents, which can deter new users and inhibit mass adoption due to perceived invasiveness and skepticism about cryptocurrencies.

Innovation Solution

A payment network system that facilitates rapid onboarding by receiving API calls, transmitting user verification requests to an issuer system, and responding with verification results to cryptocurrency exchanges, leveraging existing payment network infrastructure to streamline user authentication.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If conventional authentication protocols are used to verify user identity on cryptocurrency exchanges, then security and verification accuracy are improved, but authentication time and user experience deteriorate

Engineering Contradiction:

Improveauthentication securityVSAvoidauthentication time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The payment network performs authentication actions in advance when users establish payment accounts. User identity information is verified and stored during account setup, so that when the user later accesses a cryptocurrency exchange, the authentication has already been completed preliminarily, enabling rapid onboarding without repeating the full verification process.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The payment network acts as an intermediary between the cryptocurrency exchange and the user authentication process. The exchange sends authentication requests through the payment network's API, which then queries the pre-stored user information from the issuer system, mediating the verification process and reducing the time burden on both users and exchanges.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Reliability

If sensitive identification documents are required for user verification, then authentication reliability is improved, but user privacy concerns and adoption barriers increase

Engineering Contradiction:

Improveverification accuracyVSAvoiduser privacy concerns

Core Design Contradiction:

ReliabilityVSObject-affected harmful factors

Solution Approach 1:

The patent extracts the sensitive identification document handling from the cryptocurrency exchange process and relocates it to the payment network's issuer system. Users submit and verify their identification documents only once when establishing a payment account, and this pre-verified information is then used for subsequent cryptocurrency exchange authentication without requiring users to resubmit sensitive documents.

Inventive Principle:

Principle #2Taking out (Extraction)

Solution Approach 2:

The payment network creates a copy of the pre-verified user authentication data stored in the issuer system and uses this copy to respond to cryptocurrency exchange authentication requests. This eliminates the need for users to repeatedly provide original sensitive documents, reducing privacy concerns while maintaining verification reliability.

Inventive Principle:

Principle #26Copying

3Reliability

If traditional authentication processes are implemented on cryptocurrency exchanges, then security verification is improved, but device complexity and onboarding difficulty increase

Engineering Contradiction:

Improveauthentication securityVSAvoidauthentication system complexity

Core Design Contradiction:

ReliabilityVSDevice complexity

Solution Approach 1:

The payment network's authentication system serves multiple functions: it authenticates users for payment transactions, stores verified identity information, and provides authentication verification for cryptocurrency exchanges. This multi-functional approach eliminates the need for cryptocurrency exchanges to build separate authentication systems, reducing overall system complexity while maintaining security.

Inventive Principle:

Principle #6Universality (Multi-functionality)

Solution Approach 2:

The payment network's issuer system automatically stores and manages pre-verified user authentication data, making it readily available for future verification requests. This self-service capability eliminates the need for manual authentication processes or complex verification workflows at the point of cryptocurrency exchange access, simplifying the user experience.

Inventive Principle:

Principle #25Self-service

Data Source

PatentUS12456148B2Devices, systems, and methods for authenticating an account for transacting on cryptocurrency exchanges

Publication Date: 2025.10.28 VISA INTERNATIONAL SERVICE ASSOCIATION

AI summary

A method of rapidly onboarding a user for access to trade on a cryptocurrency exchange via a payment network is disclosed herein. The method can include receiving an application program interface (“API”) call including a request to authenticate the user for access to trade on the cryptocurrency exchange, wherein the request includes information associated with an account of the user, transmitting the request to an issuer system associated with the account, receiving a verification result from the issuer system, wherein the verification result is based on user identifying information previously authenticated by the issuer system in association with the account, wherein the verification result is indicative of an authenticity status of the user, and responding to the request by transmitting an indication of the verification result to the cryptocurrency exchange.