Coinbase Patents AI Compliance System to Monitor and Flag Accounts

Popular U.S. cryptocurrency exchange Coinbase received a patent November 19, for an AI-driven compliance system which would monitor customer accounts, flagging those deemed non-compliant and recategorizing them for corrective action. Described as a “compliance determination and enforcement platform and method,” the new system would monitor a long list of KYC/AML-related details, including “level of due diligence that has been performed on the user account.”

Coinbase Granted Patent

The new patent for Coinbase’s “Self-learning compliance determination and enforcement platform” was filed on Sept. 21, 2016 and was granted just over three years later, last week, on Nov. 19.

The patent details that “The compliance model core includes a factor entering module, a compliance score model, a comparator, and a flagging unit,” and will review user account details including but not limited to: age, “due diligence,” balance, transaction volumes, geographical location, previous reviews, if and how a user has verified identity, email domain, number of addresses, “number of bitcoin addresses transacted with,” number of bank accounts, IPs, phone numbers, verification attempts, and “the other party in the transaction.”

The patent describes an enforcement mechanism, noting: “the user accounts that fail compliance are flagged to indicate non-compliant accounts … corrective action is executed only for the accounts that are flagged as non-compliant accounts.” Read More...


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