Security & Fraud

Fearful Of Fraud, FICO Wants A Closer Look At Bitcoin Transactions

The Fair Isaac Corporation — better known as FICO — has filed an application with the U.S. Patent and Trademark Office for a system designed to detect unusual and potentially fraudulent transactions.

The system, according to reports, is a response to the rise of bitcoin and other cryptocurrencies and the emerging ease of moving vast quantities of money largely anonymously.

FICO’s goal is gather publicly available information from cryptocurrency exchange sites and cryptocurrency miners so it can follow the flow of funds across cryptocurrency rails.

FICO’s application described the system as “a cloud-based data store [that] integrates information from multiple sources, including: a) Entities associated with legal and illicit bitcoin exchanges b) Entities associated with mobile payment and remittance networks.”

Privacy-focused currencies — specifically, Monero — make it nearly impossible to track money via a public ledger, but Monero is fairly specialized and needs to be changed into other more mainstream currencies like bitcoin before it can be turned into cash or goods.

Cryptocurrency also presents a unique challenge in that even if fraud is found, it is not really possible to shut it down — thousands of node computers worldwide handle the synchronizing network transactions and keep all users up to date with the latest blockchain data. And providing ownership of digital currency is equally difficult — particularly because not being able to do that is pretty much baked into the design.

FICO tech to solve this problem may not be up to the task of fully dealing with blockchain-related fraud — but it is at least a sign that the most mainstream players in the financial services landscape are catching on to the idea that cryptocurrency is neither a fad nor a niche product they can afford to ignore.



Social distancing has changed eCommerce from a ‘want to have’ to a ‘must have’ for businesses, yet retailers could struggle to create convenient payment and refund experiences for their apps and websites, says Abdul Raof Latiff, head of DBS Bank’s digital institutional banking group. In the April 2020 B2B API Tracker, Latiff explains how banks can provide a timely assist via application programming interfaces (APIs) that integrate payments into those eCommerce platforms.