Semi-Redundant Ledger Architecture for Private Securities Transactions
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Solution Overview
Problem
Existing platforms for trading digital securities representing real assets face challenges in maintaining transaction privacy and security, and existing platforms do not effectively manage transaction management systems, particularly in maintaining a public record of each transaction executed on the platform, in which personally identifiable information (PII) of parties to the transaction are not disclosed and therefore not publicly accessible via the semi-redundant ledgers.
Innovation Solution
A transaction platform with semi-redundant ledgers that maintain a public record of each transaction executed on the platform, in which personally identifiable information (PII) of parties to the transaction are not disclosed and therefore not publicly accessible via the semi-redundant ledgers.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If a single public ledger is used for transaction recording, then transparency and immutability are achieved, but privacy of personally identifiable information is compromised
Solution Approach 1:
The patent divides the ledger system into two separate ledgers: a public ledger that records transaction hashes and a private ledger that stores personally identifiable information. This segmentation allows the public ledger to maintain transparency and immutability while the private ledger protects privacy by storing sensitive data separately and encrypting it.
2Reliability
If manual compliance processes are used for securities trading, then regulatory requirements can be addressed, but operational efficiency and productivity are reduced
Solution Approach 1:
The system implements automated compliance checking where the platform automatically verifies investor accreditation status, performs KYC/KYB validations, and enforces trading restrictions based on regulatory requirements. This self-service approach to compliance eliminates manual review processes while maintaining regulatory adherence, thereby improving operational efficiency.
3Reliability
If centralized transaction management is used, then control and security are maintained, but system complexity and difficulty of detection increase
Solution Approach 1:
The patent introduces a transfer agent as an intermediary component that manages the synchronization between the public and private ledgers. The transfer agent handles the complex tasks of hashing transaction data, encrypting personally identifiable information, and maintaining consistency between ledgers, thereby simplifying the overall system architecture while maintaining security and control.
Data Source
AI summary
In certain aspects of the disclosure, a computer-implemented method includes creating a wallet for asset tokens and creating an account for a first user upon completion of user onboarding validation. The method includes associating the account with one of an individual and a business entity. The method includes initiating one of know-your-customer (KYC) for the individual and know-your-business (KYB) for the business entity. The method includes enabling the first user to access and make transactions using the wallet.