Policy-Based Blockchain Transaction Emulation for Compliance Control
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Solution Overview
Problem
Cryptocurrency transactions lack inherent restrictions, allowing transactions with potentially sanctioned or criminal entities and exceeding predefined amounts, and the effects of smart contract executions are not fully apparent from static analysis.
Innovation Solution
Implement a policy-based framework using a transaction emulator service that evaluates blockchain transactions against compliance policies, emulating their execution to ensure adherence to predefined rules, including prohibited addresses and transaction limits, and dynamically analyzing smart contract interactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Ease of operation
If cryptocurrency transactions are allowed without restrictions to ensure freedom of transfer, then ease of operation is improved, but security and compliance are worsened
Solution Approach 1:
A policy-based transaction evaluation system is introduced as an intermediary between transaction initiation and blockchain propagation. This system includes policy definition modules, transaction evaluation modules, and compliance checking mechanisms that mediate between free transaction operations and compliance requirements, allowing unrestricted user operation while ensuring regulatory compliance through automated policy enforcement.
2Reliability
If transaction evaluation and compliance checking is implemented to improve security, then reliability is improved, but device complexity is worsened
Solution Approach 1:
The compliance system is segmented into distinct functional modules: policy definition modules that store compliance rules, transaction evaluation modules that analyze transactions against policies, and enforcement modules that prevent non-compliant transactions. This segmentation allows each component to be independently developed, maintained, and scaled, reducing overall system complexity while maintaining comprehensive compliance checking.
Solution Approach 2:
The system implements self-service mechanisms where transactions automatically evaluate themselves against predefined policies without requiring manual review. The transaction evaluation module autonomously checks compliance conditions, and non-compliant transactions are automatically rejected, eliminating the need for complex manual compliance verification processes.
3Measurement precision
If smart contract execution effects are analyzed dynamically to improve detection accuracy, then measurement precision is improved, but loss of time is worsened
Solution Approach 1:
The system performs preliminary static analysis of smart contract code before execution to identify potential compliance issues and high-risk operations. By pre-evaluating contract logic and flagging suspicious patterns, the system reduces the need for extensive dynamic analysis during actual transaction processing, thereby maintaining detection accuracy while minimizing processing time delays.
Solution Approach 2:
For transactions that pass initial static analysis and appear compliant, the system skips extensive dynamic execution analysis and proceeds directly to approval. This selective approach allows the system to rush through obviously compliant transactions quickly while applying more thorough analysis only to suspicious cases, balancing detection precision with processing efficiency.
Data Source
AI summary
Policy-based blockchain transactions include applying a policy-based framework to blockchain transactions, such as those involving the transfer or payment of cryptocurrency coins or tokens. In the various embodiments of the present disclosure, blockchain transactions that comply with one or more predefined policies will be approved for propagation or publication to a blockchain network, while cryptocurrency coin or token transactions that are not compliant will be rejected or prevented from propagating to the blockchain network.