Laundering detection in second layer networks

Patent metadata

Field	Value
Publication number	US-12307454-B2
Application number	US-202117562754-A
Country	US
Kind code	B2
Filing date	Dec 27, 2021
Priority date	Dec 27, 2021
Publication date	May 20, 2025
Grant date	May 20, 2025

Abstract

Methods and systems are presented for tracking activities that occur off of a first layer blockchain in in a second layer network built on the first layer blockchain. In one embodiment, a computer system determines that a transfer of cryptocurrency from a first node to a second node has transpired in the second layer network based on querying channel capacities in the second layer network. The computer system determines a first public address for the first node based on information associated with a first channel that connects the computer system and the first node in the second layer network, and determines a second public address for the second node based on information associated with a second channel that connects the computer system and the second node in the second layer network. The first public address and the second public address are used to monitor activity in the first layer blockchain.

First claim

What is claimed is:

1. A computer system comprising:
a non-transitory memory storing instructions; and
one or more hardware processors configured to execute the instructions and cause the computer system to perform operations comprising:
receiving, through a first channel in a second layer network layered on top of a first layer blockchain network, a request to transfer cryptocurrency from a first node in the second layer network, wherein the request to transfer the cryptocurrency is locked under a specified condition, wherein the request to transfer the cryptocurrency is unlocked when the specified condition is resolved, and wherein the resolution of the specified condition involves a value of a variable that is unknown to the computer system;
receiving, from a second node in the second layer network, the value of the variable;
identifying, based on the receiving of the value of the variable, the second node in the second layer network as a recipient to which to transfer the cryptocurrency;
determining a first public address for the first node based on information associated with an establishment of the first channel;
determining a second public address for the second node based on information associated with an establishment of a second channel between the computer system and the second node, wherein the first public address and the second public address are used for the first layer blockchain network;
monitoring network activity of the first public address or the second public address, wherein the monitoring comprises:
probing a topology of the second layer network;
discovering one or more new nodes in the second layer network based on the probing; and
determining whether the first node or the second node opens an additional channel with at least one of the one or more new nodes in the second layer network; and

detecting, based on the monitoring of the network activity, a potential money laundering attempt associated with a first user corresponding to the first public address or with a second user corresponding to the second public address.

2. The computer system of claim 1 , wherein the operations further comprise:
establishing a channel with each node in the second layer network such that the computer system is a third node in the second layer network that is one hop away from every node in the second layer network.

3. The computer system of claim 2 , wherein the operations further comprise adjusting a processing incentive amount for using the third node to transfer the cryptocurrency between nodes in the second layer network.

4. The computer system of claim 3 , wherein the processing incentive amount is adjusted to be less than each processing incentive amount broadcasted by other processing nodes in the second layer network.

5. The computer system of claim 1 , wherein the operations further comprise:
tracking transfers of the cryptocurrency from the second node to other nodes in the second layer network;
determining public addresses of the other nodes for the first layer blockchain network; and
generating a report that includes the public addresses of the first node, the second node, and the other nodes, wherein the report is useable to monitor network activity of the public addresses on the first layer blockchain network.

6. The computer system of claim 1 , wherein the operations further comprise routing the cryptocurrency, from the first node to the second node, using the second channel in the second layer network, wherein the first channel was established between the computer system and the first node with an inclusion of a first hashed timelock contract (HTLC), and wherein the second channel was established between the computer system and the second node with an inclusion of a second HTLC that has a same condition as the first HTLC.

7. The computer system of claim 1 , wherein the probing of the topology is performed on a periodic basis.

8. The computer system of claim 1 , wherein the additional channel comprises a payment channel.

9. A method, comprising:
receiving, through a first channel in a second layer network layered on top of a first layer blockchain network, a request to transfer cryptocurrency from a first node in the second layer network, wherein the request to transfer the cryptocurrency is locked under a specified condition, and wherein the resolution of the specified condition involves a value of a variable that is unknown to an entity that receives the request;
receiving, from a second node in the second layer network, the value of the variable;
identifying, based on the receiving of the value of the variable, the second node in the second layer network as a recipient to which to transfer the cryptocurrency;
determining a first public address for the first node based on information associated with an establishment of the first channel;
determining a second public address for the second node based on information associated with an establishment of a second channel between a computer system and the second node, wherein the first public address and the second public address are usable for the first layer blockchain network;
monitoring network activity of the first public address or the second public address, wherein the monitoring comprises:
accessing a plurality of nodes of the second layer network based on a probed topology of the second layer network; and
determining whether the first node or the second node opens an additional channel with a node of the plurality of nodes of the second layer network; and

detecting, based on the monitoring of the network activity, a potential money laundering attempt associated with a first user corresponding to the first public address or with a second user corresponding to the second public address.

10. The method of claim 9 , further comprising:
establishing a channel with each node in the second layer network such that the computer system is a third node in the second layer network that is one hop away from other nodes in the second layer network.

11. The method of claim 10 , further comprising adjusting a processing incentive amount for using the third node to transfer the cryptocurrency between nodes in the second layer network.

12. The method of claim 11 , wherein the processing incentive amount is adjusted to be less than each processing incentive amount broadcasted by other processing nodes in the second layer network.

13. The method of claim 9 , further comprising:
tracking transfers of the cryptocurrency from the second node to other nodes in the second layer network;
determining public addresses of the other nodes for the first layer blockchain network; and
generating a report that includes the public addresses of the first node, the second node, and the other nodes, wherein the report is useable to monitor network activity of the public addresses on the first layer blockchain network.

14. The method of claim 9 , further comprising routing the cryptocurrency, from the first node to the second node, using the second channel in the second layer network, wherein the first channel was established between the computer system and the first node with an inclusion of a first hashed timelock contract (HTLC), and wherein the second channel was established between the computer system and the second node with an inclusion of a second HTLC that has a same condition as the first HTLC.

15. The method of claim 9 , further comprising discovering one or more new nodes of the plurality of nodes based on probing the topology of the second layer network.

16. A non-transitory machine-readable medium having instruc

Assignees

• Paypal Inc

Inventors

• Saad Muhammad
• Burgis Jakub
• Johnson Raoul

Classifications

• H04L9/50 Primary

  using hash chains, e.g. blockchains or hash trees · CPC title

• H04L2209/56

  Financial cryptography, e.g. electronic payment or e-cash · CPC title

• G06Q2220/00

  Business processing using cryptography · CPC title

• H04L9/3239

  involving non-keyed hash functions, e.g. modification detection codes [MDCs], MD5, SHA or RIPEMD · CPC title

• G06Q20/4016

  involving fraud or risk level assessment in transaction processing · CPC title