Bank of America [BoA], the second largest bank in the United States based on assets held, signaled their concern for the cryptocurrency community. The North Carolina-headquartered bank secured a patent for a cryptocurrency risk detection system.
According to an April 30 filing with the United States Patent and Trademark Office [USPTO], the patent granted to BoA is primed on a risk detection system specifically geared towards virtual currencies. On the basis of the system, a risk score will be levied on cryptocurrency transactions between a customer and a third party.
The statement read:
“As technology advances, financial transactions involving cryptocurrency have become more common. For some enterprises, it may be desirable to calculate the risk for performing a cryptocurrency transaction.”
Bank of America, through this patent, aims to maintain the transparency and trustworthiness of cryptocurrency transactions, thereby ensuring that the risk taken is lowered.
The patent’s abstract suggested that the system will include a “processor” that can receive a request from the customer to perform a crypto-transaction with a requested third party. Here on in, the processor may perform a slew of functions, retrieve blockchain information, determine the value of crypto in the transaction or calculate the “risk score” of the transaction based on the preceding factors.
More than one processor can be integrated on the system so that a number of aspects within the transactions can be tagged simultaneously. The document highlighted the public key usage, transaction history and crypto-units in question. As mentioned earlier, the risk score will also be assessed and a score will be assigned.
The risk score determines whether the transactions fall under the suspicious category, indicating whether a further investigation into the transaction is required.
In August 2018, the bank filed for a patent for a cryptocurrency storage system that would allow companies to seamlessly store their cryptocurrency-related transactions. This patent was officially granted to BoA in October with the title “hardened storage device,” creating a protocol to store cryptographic keys.
Furthermore, BoA has previously attested to the technology that propels the cryptocurrency space, blockchain. In a study released last October, the analysts at the American bank highlighted companies like Amazon and Microsoft that can be major beneficiaries of blockchain technology implementation.
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ErisX goes all hands on deck to launch a Bitcoin Futures market
ErisX’s CSO, Matt Trudeau, detailed the company’s four important plans for the future, which includes launching a spot market, to secure a Bit License, DCO, and to launch a futures market.
ErisX currently has a DCM contract, which is a Derivative Contract Market that allows ErisX to run a CFTC-regulated futures exchange. However, ErisX aims to get a DCO [Derivatives Organization], which will effectively allow it to run a CFTC-regulated clearinghouse. A clearinghouse would mean that ErisX can take control of the custody of the assets and clear and settled trades.
The CSO explained the benefit of this, stating,
“There is some efficiency for firms like producers [like mining companies]; if they need to hedge their inventory or need liquidity on a spot market, they could do that conveniently on a single platform. “
Trudeau added that from the “post-trade standpoint” and “the collateral management standpoint,” ErisX would have cash, crypto, and the futures, all stored in their clearinghouse. This would boost efficiency since it would be available for all customers under a single platform. The CSO added,
“… so there is some efficiency in terms of managing collateral, if you don’t have assets on multiple platforms, it can all be in our clearinghouse.”
Apart from the aforementioned plans, Trudeau added that the crypto-industry needs to mature more and that ErisX plans to make a significant contribution to that. He added,
“The market is professionalizing and we think that in terms of what institutions are expecting from a trading/custody experience, we will bring some of the solutions to the market and that’s really the foundational pieces that they are looking in order to build their businesses on top of us.”
Apart from ErisX, LedgerX has also received a go-sign from the CFTC to settle Bitcoin Futures in Bitcoins. Other exchanges include Intercontinental Exchange’s Bakkt and Seed CX.
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