Despite the multitude of benefits of cryptocurrencies and blockchain, there are still some concerns about the technology. One of the issues that have been raised is the potential use of this technology for criminal exploits and financing of terrorist activities. Recently this has led to measures being taken against bitcoin companies, including banks in Australia closing bank accounts as they cannot determine where or who the transactions are coming from.
In a public blockchain, no one owns or controls the blockchain, which is core to the decentralized nature; however, the lack of control has resulted in the search for options to increase security, such as the Bank of England, who are looking at ways to implement distributed ledger technology to secure their interests. Their aim is to preserve the decentralized nature of blockchain whilst providing a measure of safety and accountability for the users.
Nevada based Aten Coin has introduced their solution: a proprietary, privately regulated public blockchain. Designed to solve the problems of money laundering, criminal and terrorist financing and online theft, it launched last month. Named after the Egyptian god (I’d have gone for Maat, representing truth and justice, rather than a sun god fanatically promoted by a king who wanted to eliminate the competition), the National Aten Coin Foundation (NAC) began development in 2012; since its inception, NAC has become a Platinum Service Member of the American Bank Association (ABA) and is compliant with the following agencies: Anti-Money Laundering (AML), Counter Financing of Terrorism (CFT), Anti-Fraud and Financial Crimes (AFF), Office of Foreign Assets Control (OFAC), Bank Secrecy Act (BSA), USA PATRIOT Act and the FACT Act.
The solution the NAC has invented is a method that allows people to trace and track identities senders and receivers of a cryptocurrency when necessary. Essentially it is a privately-regulated, public blockchain. Anyone in the world can read the Aten Coin blockchain and participate in transaction verification and mining; however, Aten Coin can be regulated when it comes to KYC/AML compliance and anti-terrorist compliance, maintaining the core decentralized aspect of blockchain.
The protocol involves an integration of three major processes, including personal identity verification, credential authentication and a two-party signature scheme. A regulation system is introduced at the blockchain level in the way that (i) all Aten Coin addresses must be multisignature addresses comprising of a pair of public key and private key from NAC and at least one pair of public key and private key from an Aten Coin user, and (ii) all Aten Coin addresses can only be created by people whom have got an authorization from NAC. Furthermore, (iii) without NAC’s authorization, no one can use any Aten Coin addresses to send any Aten Coins that are recorded (stored) at the Aten Coin addresses. In order to obtain authorization from NAC, all Aten Coin Users must register as an Aten Coin User in the NAC’s systems, and in the process of registration all potential Aten Coin Users must provide valid document to disclose their legal identities.
Founder of NAC, Marcus Andrade, explained, to begin with, after registering at their website, users “will be given an Aten ID, and will be allowed to create their private Aten Credentials, which will be subsequently approved by NAC’s system to be used as valid credentials to obtain NAC’s authorization for generating Aten Coin addresses as well as for making Aten Coin transactions,”. Andrade stressed that the passwords would only be known by the user, not the NAC, as it was all built into the code.
He went on to describe a typical transaction process, whereby “NAC’s authentication system will automatically provide authorization to any request for address generation or transaction creation as well as signing a transaction upon the receipt of a valid Aten Credential. Therefore, most of the time Aten Coin will function in the way similar to Bitcoin, except that by design Aten Coin transactions are faster, cheaper and more secure. All transaction data is available in the Aten Coin’s blockchain, which is open to the public. Public will not be able to know the identities of Aten Coin senders and receivers as in the case of Bitcoin. However, real identities of the senders and receivers are kept in NAC’s system with protection.”
By doing this, the system would allow NAC to trace and reveal identities of any parties suspected of being involved with criminal activities. Andrade also revealed that, as well as reporting suspicious transactions, they also had the ability to restrict the availability of Aten Coin from unauthorized countries. These opportunities, he claimed, would help stop the funding of terrorist activities, in addition to allowing stolen or hacked currency to be tracked.