IP Library › Granted Patent US 12700004
Granted Patent B2
US 12700004 · App. 18/761,911 · Granted Aug 4, 2026

Systems and methods for preventing fraud in transactions in real-time

Inventors: Harsh Vardhan Singh (Edison, NJ); Sanjeev Dhupkar (Cary, NC); Man Hei Raymond Yim (Cambridge, MA); Nishant Mehta (Jersey City, NJ); Phanindra Grandhi (East Brunswick, NJ); Sandeep Bagde (South Plainfield, NJ)
Assignee: FMR LLC
G06Q20/4016H04L9/0643H04L63/0823
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Quick Facts
Patent No.
US 12700004
App. No.
18/761,911
Granted
Aug 4, 2026
Kind
B2
Abstract

Systems and methods are described for preventing fraud in transactions in real-time. A first computing device associated with an issuing authority may generate compliance certificates including one or more restriction rules that prohibit specific transactions from being executed by an entity that is regulated by the issuing authority. When a user requests a second computing device associated with the entity to perform a transaction, the second computing device determines whether it can execute the transaction in the request in view of the one or more restriction rules in the compliance certificate. In case the transaction includes attributes that would violate at least one of the one or more restriction rules, the second computing device rejects or blocks the transaction. On the other hand, in the case, the transaction includes attributes that does not violate any of the one or more restriction rules, the second computing device executes the transaction.

Claims (51)

1 . A computing (or computer) system for authenticating compliance certificates, the system comprising a server computing device having a memory for storing computer-executable instructions and a processor that executes the computer-executable instructions to:

receive a compliance certificate from an issuing authority, the compliance certificate comprising one or more restriction rules associated with digital currency transactions using blockchains and one or more digital fingerprints, wherein each of the one or more restriction rules comprises one or more prohibited attributes, wherein each of the one or more digital fingerprints comprises a first hash of a corresponding restriction rule of the one or more restriction rules calculated using a first hash function, the compliance certificate being encrypted using an encryption key for the issuing authority;

authenticate the compliance certificate based on decryption of the compliance certificate using a decryption key corresponding to the encryption key for the issuing authority;

calculating a second hash of each of the one or more restriction rules using a second hash function;

comparing the second hash of each of the one or more restriction rules with the first hash comprised in the digital fingerprint of the corresponding restriction rule;

in response to determining that the second hash of at least one of the one or more restriction rules fails to match the first hash comprised in the digital fingerprint of the corresponding restriction rule, reject the compliance certificate;

in response to determining that each second hash of the one or more restriction rules matches each of the first hash comprised in the digital fingerprint of the corresponding restriction rule, process one or more digital currency transactions based on the compliance certificate, comprising:

receive requests to execute the one or more digital currency transactions, wherein each of the one or more digital currency transactions includes one or more attributes;

execute a first digital currency transaction of the one or more digital currency transactions in response to determining that one or more attributes of the first digital currency transaction does not comprise the one or more prohibited attributes of the one or more restriction rules in the compliance certificate; and

generate a transaction receipt after the execution of the first digital currency transaction, the transaction receipt including a compliance signature, which certifies the first digital currency transaction does not comprise the one or more prohibited attributes of the one or more restriction rules.

2 . The system of claim 1 , wherein the one or more attributes of at least one of the one or more digital currency transactions includes at least one of a first party, a second party, a first digital asset, and a second digital asset, and wherein the at least one of the one or more digital currency transactions identifies an exchange between the first digital asset associated with the first user and a second digital asset associated with the second user.

3 . The system of claim 2 , wherein the transaction receipt is transmitted to the first party and the second party when a digital currency transaction associated with both the first party and the second party has been executed.

4 . The system of claim 1 , wherein the computer executable instructions cause the processor to perform further operations to:

reject a second digital currency transaction of the one or more transactions in response to determining that one or more attributes of the second digital currency transaction comprise the one or more prohibited attributes of at least one of the one or more restrictions rules; and

transmit a fraud notification to the issuing authority indicating that the second digital currency transaction has been successfully blocked.

5 . The system of claim 4 , wherein the computer executable instructions cause the processor to perform further operations to:

receive an updated compliance certificate from the issuing authority, wherein the updated compliance certificate includes one or more updated restriction rules and one or more updated digital fingerprints, wherein each of the one or more updated restriction rules comprise one or more updated prohibited attributes, wherein each of the one or more updated digital fingerprints comprises a third hash of a corresponding updated restriction rule of the one or more updated restriction rules calculated using a third hash function, and wherein at least one of the one or more updated restriction rules are different from the one or more restriction rules.

6 . The system of claim 5 , wherein the computer executable instructions cause the processor to perform further operations to: determine that the one or more attributes of the first digital currency transaction comprise the one or more updated prohibited attributes of at least one of the one or more updated restriction rules.

7 . The system of claim 5 , wherein the computer executable instructions cause the processor to perform further operations to: determine that the one or more attributes of the second digital currency transaction does not comprise the one or more updated prohibited attributes of the one or more updated restriction rules.

8 . A non-transitory computer-readable medium including computer-executable instructions that, when executed by a computing device, causes the computing device to:

receive a compliance certificate from an issuing authority, the compliance certificate comprising one or more restriction rules associated with digital currency transactions using blockchains and one or more digital fingerprints, wherein each of the one or more restriction rules comprises one or more prohibited attributes, wherein each of the one or more digital fingerprints comprises a first hash of a corresponding restriction rule of the one or more restriction rules calculated using a first hash function, the compliance certificate being encrypted using an encryption key for the issuing authority;

authenticate the compliance certificate based on decryption of the compliance certificate using a decryption key corresponding to the encryption key for the issuing authority;

calculate a second hash of each of the one or more restriction rules using a second hash function;

compare the second hash of each of the one or more restriction rules with the first hash comprised in the digital fingerprint of the corresponding restriction rule;

in response to determining that the second hash of at least one of the one or more restriction rules fails to match the first hash comprised in the digital fingerprint of the corresponding restriction rule, reject the compliance certificate;

in response to determining that each second hash of the one or more restriction rules matches each of the first hash comprised in the digital fingerprint of the corresponding restriction rule, process one or more digital currency transactions based on the compliance certificate, comprising:

receive requests to execute the one or more digital currency transactions, wherein each of the one or more digital currency transactions includes one or more attributes;

execute a first digital currency transaction of the one or more digital currency transactions in response to determining that one or more attributes of the first digital currency transaction does not comprise the one or more prohibited attributes of the one or more restriction rules in the compliance certificate; and

generate a transaction receipt after the execution of the first digital currency transaction, the transaction receipt including a compliance signature, which certifies the first digital currency transaction does not comprise the one or more prohibited attributes of the one or more restriction rules.

9 . The non-transitory computer-readable medium of claim 8 , wherein the compliance certificate further includes a private key for the issuing authority, and wherein the computer executable instructions cause the processor to perform further operations to:

digitally sign the transaction receipt using the private key included in the compliance certificate.

10 . The non-transitory computer-readable medium of claim 8 , wherein the encryption key for the issuing authority comprises a private key of the issuing authority, wherein the computer executable instructions to authenticate the compliance certificate comprises computer executable instructions to cause the computing device to perform further operations to:

authenticate the compliance certificate using a public key corresponding to the private key of the issuing authority.

11 . The non-transitory computer-readable medium of claim 8 , wherein the compliance signature comprises one or more compliance signed rules corresponding to the one or more restriction rules, wherein each of the one or more compliance signed rules comprises a third hash of the corresponding restriction rule using a third hash function, wherein the compliance signature is signed using a private key of the issuing authority.

12 . The non-transitory computer-readable medium of claim 11 , wherein the third hash function is different from the first hash function.

13 . The non-transitory computer-readable medium of claim 12 , wherein at least one of the first hash function and the third hash function are generated using a hashing algorithm from one of the following hashing algorithm families: MD5, SHA-0, SHA-1, SHA-2, and Keccak including SHA-3.

14 . A computerized method for authenticating compliance certificates time, the method comprising:

receiving a compliance certificate from an issuing authority, the compliance certificate comprising one or more restriction rules associated with digital currency transactions using blockchains and one or more digital fingerprints, wherein each of the one or more restriction rules comprises one or more prohibited attributes, wherein each of the one or more digital fingerprints comprises a first hash of a corresponding restriction rule of the one or more restriction rules calculated using a first hash function, the compliance certificate being encrypted using an encryption key for the issuing authority;

authenticating the compliance certificate based on decryption of the compliance certificate using a decryption key corresponding to the encryption key for the issuing authority;

calculating a second hash of each of the one or more restriction rules using a second hash function;

comparing the second hash of each of the one or more restriction rules with the first hash comprised in the digital fingerprint of the corresponding restriction rule;

in response to determining that the second hash of at least one of the one or more restriction rules fails to match the first hash comprised in the digital fingerprint of the corresponding restriction rule, rejecting the compliance certificate;

in response to determining that each second hash of the one or more restriction rules matches each of the first hash comprised in the digital fingerprint of the corresponding restriction rule, processing one or more digital currency transactions based on the compliance certificate, comprising:

receiving requests to execute the one or more digital currency transactions, wherein each of the one or more digital currency transactions includes one or more attributes;

executing a first digital currency transaction of the one or more digital currency transactions in response to determining that one or more attributes of the first digital currency transaction does not comprise the one or more prohibited attributes of the one or more restriction rules in the compliance certificate; and

generating a transaction receipt after the execution of the first digital currency transaction, the transaction receipt including a compliance signature, which certifies the first digital currency transaction does not comprise the one or more prohibited attributes of the one or more restriction rules.

15 . The computerized method of claim 14 , wherein the issuing authority is a regulatory government agency, a self-regulating organization, or a private company.

16 . The computerized method of claim 14 , wherein the one or more restrictions rules prevent transactions with at least one of entities associated with one or more particular countries, entities associated with one or more particular digital addresses of a digital wallet, one or more tokens, one or more currencies, and one or more financial instruments.

17 . The computerized method of claim 14 , wherein the compliance certificate further includes at least one of an entity to whom the compliance certificate is being issued, public key associated with the entity, private key associated with the entity, domain name associated with the entity, subdomains associated with the entity, issuing authority who is issuing the compliance certificate, digital signature of the issuing authority, issue date of the compliance certificate, and expiry date of the compliance certificate.

18 . The computerized method of claim 14 , wherein the issuing authority regulates two or more market exchanges, wherein the issuing authority issues unique compliance certificates to each of the two or more market exchanges, and wherein each of the issued unique compliance certificates includes the same one or more restriction rules.

19 . The system of claim 1 , wherein the computer executable instructions cause the processor to perform further operations to: reject the first digital currency transaction in response to determining that the one or more attributes of the first digital currency transaction comprise the one or more prohibited attributes of at least one of the one or more restriction rules.