PLATFORM FOR THE PURCHASE AND SALE OF DIGITAL CURRENCY

• US 20150220928A1
• Filed: 03/13/2014
• Published: 08/06/2015
• Est. Priority Date: 01/31/2014
• Status: Abandoned Application

• Current Assignee: Robert Allen
• Original Assignee: Robert Allen
• Inventors: Allen, Robert
• Application Number:
  US14/210,414
• Publication Number:
  US 20150220928A1
• Time in Patent Office: Days
• US Class Current: 1/1
• CPC Class Codes: G06Q 20/0655 e-cash managed centrally
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/3829 involving key management
• CPC Class Codes: G06Q 20/4016 involving fraud or risk level assessment in transaction processing
• CPC Class Codes: G06Q 2220/00 Business processing using cryptography postage metering system using cryptography G06Q2250/05
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A platform for buyers and sellers of digital currency is disclosed. The platform comprises different modules which can be used alone or in combination. When used together, they provide for a fully automated experience for a user, from account sign-up through to funds settlement. Using the platform, a buyer or seller can participate in virtually instantaneous transactions of digital currency. The platform can be expanded to buy and sell other commodities in addition to digital currency. The platform can permit users to fund or settle accounts using commodities such as gold rather than a globally traded currency.

Claims

1. A computer-implemented method for fully automated user registration with a system for the sale or purchase of digital currency comprising:

receiving a request from a potential user to register with a system;

acquiring first information from the potential user;

acquiring second information about the potential user based on contact of the potential user with the system;

acquiring actionable intelligence based on the first information acquired from the potential user and the second information about the potential user;

determining a risk score based on the first information, the second information and the actionable intelligence;

thereafter allowing the potential user access to the system if the potential user is assigned an acceptable risk score according to predetermined risk score standards set by the system, and denying access to the system if the potential user is assigned an unacceptable risk score according to the predetermined risk score standards;

thereafter acquiring third information from the potential user and verifying whether the potential user meets further predetermined qualifications;

thereafter running a check that meets OFAC, KYC and CIP standards based on the first information, the second information, the actionable intelligence and the third information; and

thereafter permitting the potential user to register with the system as a user if the potential user satisfies the OFAC, KYC and CIP standards.

2. The method of claim 1, wherein the first information comprises an email address.

3. The method of claim 1, wherein the second information comprises information based on the potential user'"'"'s IP address.

4. The method of claim 1, wherein the third information comprises name, address and last four numbers of the potential user'"'"'s identification information.

5. The method of claim 4, wherein the identification information comprises all or part of a Social Security number or a governmental issued identification number.

6. The method of claim 4, wherein the system comprises a digital currency exchange or a digital currency platform,

wherein in the digital currency exchange, buyers and sellers transact with each other, and the operator of the exchange is not a party to a transaction;

wherein in the digital currency platform, buyers and sellers transact with the operator of the platform to buy and sell digital currency.

7. The method of claim 6, wherein the user is assigned a unique encryption key that must be entered to gain access to the system.

8. A computer-implemented method for the sale or purchase of digital currency comprising:

a fully automated user registration process that is compliant with anti-money laundering and financial regulations and laws; and

one or more transaction validation measures for transferring money between the system and registered users,

wherein the combination of the fully automated user registration process and the transaction validation measures qualify online credit card transactions and online debit card transactions as “

card present” and

“

PIN debit on the web”

transactions for purposes of payment of merchant processing fees,

wherein the fully automated user registration process comprises;

receiving a request from a potential user to register with a system;

acquiring first information from the potential user;

acquiring second information about the potential user based on contact of the potential user with the system;

acquiring actionable intelligence based on the first information acquired from the potential user and the second information about the potential user;

determining a risk score based on the first information, the second information and the actionable intelligence;

thereafter allowing the potential user access to the system if the potential user is assigned an acceptable risk score according to predetermined risk score standards set by the system, and denying access to the system if the potential user is assigned an unacceptable risk score according to the predetermined risk score standards;

thereafter acquiring third information from the potential user and verifying whether the potential user meets further predetermined qualifications;

thereafter running a check that meets OFAC, KYC and CIP standards based on the first information, the second information, the actionable intelligence and the third information; and

thereafter permitting the potential user to register with the system as a user if the potential user satisfies the OFAC, KYC and CIP standards,

wherein the transaction validation measure comprises one or more of the purchase of a dedicated secure card reader device that is associated with the user;

downloading of an application on the user'"'"'s cell phone through which transactions can be performed on the system;

purchase of a device that attaches to any device via audio jack or USB port connectivity that processes credit card transactions on-location;

setup of an account with a third party online person-to-person payment facilitator through which funds can be transferred between the user and the system;

use of third party services through which users can charge funds to a credit or debit card to fund transactions on the system;

use of third party services through which users can charge funds to an e-wallet to fund transactions on the system; and

through the transfer of a digital image of a check along with a code issued by the platform for clearing of the check through the platform'"'"'s bank.

9. The method of claim 8 further comprising an interface between the system and a third party online person-to-person payment facilitator that allows for instant settlement of funds between the system and the user.

10. A computerized method for the purchase and sale of digital currency, comprising:

receiving log-in information from a registered user of a system that offers to sell or purchase digital currency;

permitting the user to access the system if the user satisfies predetermined on-online security standards;

receiving an encryption key from the user and determining if the encryption key was issued by the system to the user;

thereafter permitting the user to elect to purchase digital currency from the system or sell digital currency to the system if the encryption key was issued to the user by the system;

receiving affirmation of predetermined terms and conditions of the system from the user;

thereafter receiving a request from the user to purchase or sell digital currency;

wherein if the user elects to purchase digital currency, the method further comprises;

confirming that the user has elected at least one valid transaction validation measure for transfer of funds to the system in the amount of the purchase of the digital currency;

creating a temporary digital wallet for the purchase transaction;

sending a digitally signed message to a network that confirms the validity of the digital currency to be transferred to the user;

transferring the digital currency upon receipt of confirmation of validity of the digital currency into the temporary digital wallet;

confirming transfer of funds from the user to an account of the system;

transferring the digital currency from the temporary digital wallet to a personal digital wallet of the user; and

deleting the temporary digital wallet;

wherein if the user elects to sell digital currency, the method further comprises;

receiving a transfer of digital currency from the personal digital wallet of the user; and

transferring funds to an account of the user in settlement of the digital currency sale transaction.

11. The method of claim 10, wherein the-line security standards relate to the user'"'"'s IP address.

12. The method of claim 11, wherein the system determines the purchase and sale price of the digital currency to the user by acquiring information from a plurality of third party digital currency exchanges on the purchase and sale price of the digital currency;

and determining its own purchase and sale price by increasing the average sale price of one or more of the third party digital currency exchanges by a profit margin or decreasing the average purchase price of one or more of the third party digital currency exchanges by a profit margin.

13. The method of claim 10, wherein the digital currency comprises bitcoin.

14. The method of claim 10, further comprising a fully automated user registration process that is compliant with anti-money laundering and financial regulations and laws;

and one or more transaction validation measures for transferring money between the system and registered users, wherein the combination of the fully automated user registration process and the transaction validation measures qualify online credit card transactions and online debit card transactions as “

card present” and

“

PIN debit on the web”

transactions for purposes of payment of merchant processing fees,

wherein the fully automated user registration process comprises;

receiving a request from a potential user to register with a system;

acquiring first information from the potential user;

acquiring second information about the potential user based on contact of the potential user with the system;

acquiring actionable intelligence based on the first information acquired from the potential user and the second information about the potential user;

determining a risk score based on the first information, the second information and the actionable intelligence;

thereafter allowing the potential user access to the system if the potential user is assigned an acceptable risk score according to predetermined risk score standards set by the system, and denying access to the system if the potential user is assigned an unacceptable risk score according to the predetermined risk score standards;

thereafter acquiring third information from the potential user and verifying whether the potential user meets further predetermined qualifications;

thereafter running a check that meets OFAC, KYC and CIP standards based on the first information, the second information, the actionable intelligence and the third information; and

thereafter permitting the potential user to register with the system as a user if the potential user satisfies the OFAC, KYC and CIP standards,

wherein the transaction validation measure comprises one or more of the purchase of a dedicated secure card reader device that is associated with the user;

downloading of an application on the user'"'"'s cell phone through which transactions can be performed on the system;

purchase of a device that attaches to any device via audio jack or USB port connectivity that processes credit card transactions on-location;

setup of an account with a third party online person-to-person payment facilitator through which funds can be transferred between the user and the system;

use of third party services through which users can charge funds to a credit or debit card to fund transactions on the system;

the use of third party services through which users can charge funds to an e-wallet to fund transactions on the system; and

through the transfer of a digital image of a check along with a code issued by the platform for clearing of the check through the platform'"'"'s bank.

15. The method of claim 14, wherein funds are transferred to the account of the user in settlement of the digital currency sale transaction by one or more of an ACH transaction with a user'"'"'s bank account;

issuance of a preloaded debit card by the system to the user in the amount of the settlement;

utilizing a third party online person-to-person payment facilitator and instantly disbursing funds to the user'"'"'s account with the payment facilitator by way of a wire transfer, an ACH transaction or a Check 21 substitute check or a wire.

16. The method of claim 15, wherein the user withdraw funds from the payment facilitator account by printing out a virtual check, wire, or issuance of a substitute check.

17. The method of claim 15, wherein the system comprises a privately labeled gateway to the third party online person-to-person payment facilitator account wherein any transactions utilizing the third party online person-to-person payment facilitator are conducted from the website of the system.

18. The method of claim 10, wherein all purchase and sale transactions are conducted on a single website.

19. The method of claim 10, wherein all purchase transactions are conducted on a first website and all sale transactions are conducted on a second website.

20. The method of claim 10, further comprising remote capability to operate a camera on the user'"'"'s device.