Coinbase the major American cryptocurrency exchange has received a patent for developing a unique system that identifies and notifies which accounts are non-compliant accounts.
They filed with the United States Patent and Trademark Office on November 19th, describing a system containing a scoring model that can determine a compliance score for each account, based on the respective factors associated with the respective account. The system will then compare the compliance score for each account to detect those accounts that it considers fail these compliance standards.
Removal of all non-compliant accounts
Once a flagging unit has identified a non-compliant account, the system assesses whether they are good or bad, entering the determination into a feedback system, after which is decides whether or not to close the account. The patent filing stated:
“An investigator may be able to determine whether an account is being used for illicit activities by doing research on the parties of the transaction who receive or send payment and determining whether such parties are regularly involved in illicit activities. It may for example be relatively easy to determine that a party sending or receiving payment is in the business of conducting online services that may be illegal.”