Distributed ledger technologies between anonymity and transparency: AML/CFT regulation of cryptocurrency ecosystems in the EU

The advent of Bitcoin suggested a disintermediated economy in which Internet users can take part directly. The conceptual disruption brought about by this Internet of Money (IoM) mirrors the cross-industry impacts of blockchain and distributed ledger technologies (DLTs). While related instances of non-centralisation thwart regulatory efforts to establish accountability, in the financial domain further challenges arise from the presence in the IoM of two seemingly opposing traits: anonymity and transparency. Indeed, DLTs are often described as architecturally transparent, but the perceived level of anonymity of cryptocurrency transfers fuels fears of illicit exploitation. This is a primary concern for the framework to prevent money laundering and the financing of terrorism and proliferation (AML/CFT/CPF), and a top priority both globally and at the EU level. Nevertheless, the anonymous and transparent features of the IoM are far from clear-cut, and the same is true for its levels of disintermediation and non-centralisation. Almost fifteen years after the first Bitcoin transaction, the IoM today comprises a diverse set of socio-technical ecosystems. Building on an analysis of their phenomenology, this dissertation shows how there is more to their traits of anonymity and transparency than it may seem, and how these features range across a spectrum of combinations and degrees. In this context, trade-offs can be evaluated by referring to techno-legal benchmarks, established through socio-technical assessments grounded on teleological interpretation. Against this backdrop, this work provides framework-level recommendations for the EU to respond to the twofold nature of the IoM legitimately and effectively. The methodology cherishes the mutual interaction between regulation and technology when drafting regulation whose compliance can be eased by design. This approach mitigates the risk of overfitting in a fast-changing environment, while acknowledging specificities in compliance with the risk-based approach that sits at the core of the AML/CFT/CPF regime.

Distributed argumentation technology: advancing risk analysis and regulatory compliance of distributed ledger technologies for transaction and management of securities

Distributed argumentation technology is a computational approach incorporating argumentation reasoning mechanisms within multi-agent systems. For the formal foundations of distributed argumentation technology, in this thesis we conduct a principle-based analysis of structured argumentation as well as abstract multi-agent and abstract bipolar argumentation. The results of the principle-based approach of these theories provide an overview and guideline for further applications of the theories. Moreover, in this thesis we explore distributed argumentation technology using distributed ledgers. We envision an Intelligent Human-input-based Blockchain Oracle (IHiBO), an artificial intelligence tool for storing argumentation reasoning. We propose a decentralized and secure architecture for conducting decision-making, addressing key concerns of trust, transparency, and immutability. We model fund management with agent argumentation in IHiBO and analyze its compliance with European fund management legal frameworks. We illustrate how bipolar argumentation balances pros and cons in legal reasoning in a legal divorce case, and how the strength of arguments in natural language can be represented in structured arguments. Finally, we discuss how distributed argumentation technology can be used to advance risk management, regulatory compliance of distributed ledgers for financial securities, and dialogue techniques.

Lohkoketjuteknologian soveltaminen finanssisektorille

Tämän kandidaatintutkielman tarkoituksena on tutkia, miten lohkoketjuteknologiaa voi soveltaa finanssisektorille. Tutkimus tarjoaa yleiskuvan lohkoketjuteknologista, sekä sen sovelluskohteista finanssisektorilla. Tutkimusmenetelmä on kvalitatiivinen ja se toteutettiin haastattelemalla pankkeja, jotka osallistuvat Distributed Ledger Group (DLG)-konsortioon. Kyseinen konsortio pyrkii 42 pankin ja R3cev nimisen yrityksen välisessä yhteistyössä soveltamaan lohkoketjuteknologiaa pankkisektorille. Haastattelujen perusteella pankit pitävät lohkoketjuteknologian potentiaalia pitkällä aikavälillä suurena. Erityisesti lohkoketjuteknologian odotetaan laskevan kustannuksia, sekä nopeuttavan toimintoja useiden eri tuotteiden kohdalla. Pelkästään pankkisektorilla tutkitaan tällä hetkellä kymmeniä eri sovelluskohteita. Ennen kuin lohkoketjulla voidaan nähdä kaupallista toimintaa, tulee haasteita ylittää sekä teknisellä, että säädännöllisellä puolella. Vielä on liian varhaista arvioida, milloin lohkoketjuteknologiaa tullaan soveltamaan laajemmin finanssisektorilla. Pankkien oma tutkimus aiheesta oli vielä suhteellisen varhaisessa vaiheessa. Lohkoketjuteknologian potentiaali voidaan nähdä tutkimuksen perusteella valtavan suurena. Vielä on kuitenkin vaikea arvioida tullaanko tähän potentiaaliin tulevaisuudessa yltämään. Finanssisektorilla on monia toimijoita, jotka tutkivat lohkoketjuteknologiaa ja se vauhdittaa kehitystä. Lohkoketjuteknologia saattaa tulevaisuudessa mullistaa monia finanssisektorin osa-alueita tai jopa korvata ne kokonaan.

Implications of Blockchain-Based Smart Contracts on Contract Law

Smart contracts are the most advanced blockchain applications. They can also be used in the contractual domain for the encoding and automatic execution of contract terms. Smart contracts already existed before the blockchain, but they take advantage of the characteristics of that technology. Namely, the decentralised and immutable characters of the blockchain determine that no single contracting party can control, modify, or interrupt the execution of smart contracts. As every new phenomenon, blockchain-based smart contracts have attracted the attention of institutions. For example, in its Resolution of 3 October 2018 on distributed ledger technologies and blockchain, the European Parliament has stressed the need to undertake an in-depth assessment of the legal implications,starting from the analysis of existing legal frameworks. Indeed, the present research thesis aims to verify how blockchain-based smart contracts fit into contract law. To this end, the analysis starts from the most discussed and relevant aspects and develops further considerations. Before that, it provides a detailed description and clarifications about the characteristics, the functioning, and the development of the technology, which is an essential starting point for a high-level quality legal analysis. It takes into considerations already existing rules concerning the use of technology in the life cycle of contracts, from vending machines to computable contracts, and verifies its applicability to blockchain-based smart contracts. The work does not limit to consider the mere technology, but some concrete scenarios of adoption of blockchain-based smart contracts in the contractual domain. Starting from the latter, it focuses on the implications of blockchain-based smart contracts on contract formation, contract performance, and applicable law and jurisdiction.

Decentralized systems for the protection and portability of personal data

The General Data Protection Regulation (GDPR) has been designed to help promote a view in favor of the interests of individuals instead of large corporations. However, there is the need of more dedicated technologies that can help companies comply with GDPR while enabling people to exercise their rights. We argue that such a dedicated solution must address two main issues: the need for more transparency towards individuals regarding the management of their personal information and their often hindered ability to access and make interoperable personal data in a way that the exercise of one's rights would result in straightforward. We aim to provide a system that helps to push personal data management towards the individual's control, i.e., a personal information management system (PIMS). By using distributed storage and decentralized computing networks to control online services, users' personal information could be shifted towards those directly concerned, i.e., the data subjects. The use of Distributed Ledger Technologies (DLTs) and Decentralized File Storage (DFS) as an implementation of decentralized systems is of paramount importance in this case. The structure of this dissertation follows an incremental approach to describing a set of decentralized systems and models that revolves around personal data and their subjects. Each chapter of this dissertation builds up the previous one and discusses the technical implementation of a system and its relation with the corresponding regulations. We refer to the EU regulatory framework, including GDPR, eIDAS, and Data Governance Act, to build our final system architecture's functional and non-functional drivers. In our PIMS design, personal data is kept in a Personal Data Space (PDS) consisting of encrypted personal data referring to the subject stored in a DFS. On top of that, a network of authorization servers acts as a data intermediary to provide access to potential data recipients through smart contracts.

Adaptable security in the cloud-to-thing continuum

Recent technological advancements have played a key role in seamlessly integrating cloud, edge, and Internet of Things (IoT) technologies, giving rise to the Cloud-to-Thing Continuum paradigm. This cloud model connects many heterogeneous resources that generate a large amount of data and collaborate to deliver next-generation services. While it has the potential to reshape several application domains, the number of connected entities remarkably broadens the security attack surface. One of the main problems is the lack of security measures to adapt to the dynamic and evolving conditions of the Cloud-To-Thing Continuum. To address this challenge, this dissertation proposes novel adaptable security mechanisms. Adaptable security is the capability of security controls, systems, and protocols to dynamically adjust to changing conditions and scenarios. However, since the design and development of novel security mechanisms can be explored from different perspectives and levels, we place our attention on threat modeling and access control. The contributions of the thesis can be summarized as follows. First, we introduce a model-based methodology that secures the design of edge and cyber-physical systems. This solution identifies threats, security controls, and moving target defense techniques based on system features. Then, we focus on access control management. Since access control policies are subject to modifications, we evaluate how they can be efficiently shared among distributed areas, highlighting the effectiveness of distributed ledger technologies. Furthermore, we propose a risk-based authorization middleware, adjusting permissions based on real-time data, and a federated learning framework that enhances trustworthiness by weighting each client's contributions according to the quality of their partial models. Finally, since authorization revocation is another critical concern, we present an efficient revocation scheme for verifiable credentials in IoT networks, featuring decentralization, demanding minimum storage and computing capabilities. All the mechanisms have been evaluated in different conditions, proving their adaptability to the Cloud-to-Thing Continuum landscape.

CYP2C19 and ABCB1 gene polymorphisms are differently distributed according to ethnicity in the Brazilian general population

Background: Recent studies have reported the clinical importance of CYP2C19 and ABCB1 polymorphisms in an individualized approach to clopidogrel treatment. The aims of this study were to evaluate the frequencies of CYP2C19 and ABCB1 polymorphisms and to identify the clopidogrel-predicted metabolic phenotypes according to ethnic groups in a sample of individuals representative of a highly admixtured population. Methods: One hundred and eighty-three Amerindians and 1,029 subjects of the general population of 4 regions of the country were included. Genotypes for the ABCB1c.C3435T (rs1045642), CYP2C19*2 (rs4244285), CYP2C19*3 (rs4986893), CYP2C19*4 (rs28399504), CYP2C19*5 (rs56337013), and CYP2C19*17 (rs12248560) polymorphisms were detected by polymerase chain reaction followed by high resolution melting analysis. The CYP2C19*3, CYP2C19*4 and CYP2C19*5 variants were genotyped in a subsample of subjects (300 samples randomly selected). Results: The CYP2C19*3 and CYP2C19*5 variant alleles were not detected and the CYP2C19*4 variant allele presented a frequency of 0.3%. The allelic frequencies for the ABCB1c.C3435T, CYP2C19*2 and CYP2C19*17 polymorphisms were differently distributed according to ethnicity: Amerindian (51.4%, 10.4%, 15.8%); Caucasian descent (43.2%, 16.9%, 18.0%); Mulatto (35.9%, 16.5%, 21.3%); and African descent (32.8%, 20.2%, 26.3%) individuals, respectively. As a result, self-referred ethnicity was able to predict significantly different clopidogrel-predicted metabolic phenotypes prevalence even for a highly admixtured population. Conclusion: Our findings indicate the existence of inter-ethnic differences in the ABCB1 and CYP2C19 variant allele frequencies in the Brazilian general population plus Amerindians. This information could help in stratifying individuals from this population regarding clopidogrel-predicted metabolic phenotypes and design more cost-effective programs towards individualization of clopidogrel therapy.

The Brain as a Distributed Intelligent Processing System: An EEG Study

Background: Various neuroimaging studies, both structural and functional, have provided support for the proposal that a distributed brain network is likely to be the neural basis of intelligence. The theory of Distributed Intelligent Processing Systems (DIPS), first developed in the field of Artificial Intelligence, was proposed to adequately model distributed neural intelligent processing. In addition, the neural efficiency hypothesis suggests that individuals with higher intelligence display more focused cortical activation during cognitive performance, resulting in lower total brain activation when compared with individuals who have lower intelligence. This may be understood as a property of the DIPS. Methodology and Principal Findings: In our study, a new EEG brain mapping technique, based on the neural efficiency hypothesis and the notion of the brain as a Distributed Intelligence Processing System, was used to investigate the correlations between IQ evaluated with WAIS (Whechsler Adult Intelligence Scale) and WISC (Wechsler Intelligence Scale for Children), and the brain activity associated with visual and verbal processing, in order to test the validity of a distributed neural basis for intelligence. Conclusion: The present results support these claims and the neural efficiency hypothesis.

Multi-objective analysis of impacts of distributed generation placement on the operational characteristics of networks for distribution system planning

Recent advances in energy technology generation and new directions in electricity regulation have made distributed generation (DG) more widespread, with consequent significant impacts on the operational characteristics of distribution networks. For this reason, new methods for identifying such impacts are needed, together with research and development of new tools and resources to maintain and facilitate continued expansion towards DG. This paper presents a study aimed at determining appropriate DG sites for distribution systems. The main considerations which determine DG sites are also presented, together with an account of the advantages gained from correct DG placement. The paper intends to define some quantitative and qualitative parameters evaluated by Digsilent (R), GARP3 (R) and DSA-GD software. A multi-objective approach based on the Bellman-Zadeh algorithm and fuzzy logic is used to determine appropriate DG sites. The study also aims to find acceptable DG locations both for distribution system feeders, as well as for nodes inside a given feeder. (C) 2010 Elsevier Ltd. All rights reserved.

Power imbalance application region method for distributed synchronous generator anti-islanding protection design and evaluation

This paper presents a novel graphical approach to adjust and evaluate frequency-based relays employed in anti-islanding protection schemes of distributed synchronous generators, in order to meet the anti-islanding and abnormal frequency variation requirements, simultaneously. The proposed method defines a region in the power mismatch space, inside which the relay non-detection zone should be located, if the above-mentioned requirements must be met. Such region is called power imbalance application region. Results show that this method can help protection engineers to adjust frequency-based relays to improve the anti-islanding capability and to minimize false operation occurrences, keeping the abnormal frequency variation utility requirements satisfied. Moreover, the proposed method can be employed to coordinate different types of frequency-based relays, aiming at improving overall performance of the distributed generator frequency protection scheme. (C) 2011 Elsevier B.V. All rights reserved.

A survey on key management mechanisms for distributed Wireless Sensor Networks

Wireless Sensor Networks (WSNs) have a vast field of applications, including deployment in hostile environments. Thus, the adoption of security mechanisms is fundamental. However, the extremely constrained nature of sensors and the potentially dynamic behavior of WSNs hinder the use of key management mechanisms commonly applied in modern networks. For this reason, many lightweight key management solutions have been proposed to overcome these constraints. In this paper, we review the state of the art of these solutions and evaluate them based on metrics adequate for WSNs. We focus on pre-distribution schemes well-adapted for homogeneous networks (since this is a more general network organization), thus identifying generic features that can improve some of these metrics. We also discuss some challenges in the area and future research directions. (C) 2010 Elsevier B.V. All rights reserved.

Modeling of Distributed Control Systems in Intelligent Building based on Colored Petri Nets

Distributed control systems consist of sensors, actuators and controllers, interconnected by communication networks and are characterized by a high number of concurrent process. This work presents a proposal for a procedure to model and analyze communication networks for distributed control systems in intelligent building. The approach considered for this purpose is based on the characterization of the control system as a discrete event system and application of coloured Petri net as a formal method for specification, analysis and verification of control solutions. With this approach, we develop the models that compose the communication networks for the control systems of intelligent building, which are considered the relationships between the various buildings systems. This procedure provides a structured development of models, facilitating the process of specifying the control algorithm. An application example is presented in order to illustrate the main features of this approach.

Distributed Estimation Over an Adaptive Incremental Network Based on the Affine Projection Algorithm

We study the problem of distributed estimation based on the affine projection algorithm (APA), which is developed from Newton`s method for minimizing a cost function. The proposed solution is formulated to ameliorate the limited convergence properties of least-mean-square (LMS) type distributed adaptive filters with colored inputs. The analysis of transient and steady-state performances at each individual node within the network is developed by using a weighted spatial-temporal energy conservation relation and confirmed by computer simulations. The simulation results also verify that the proposed algorithm provides not only a faster convergence rate but also an improved steady-state performance as compared to an LMS-based scheme. In addition, the new approach attains an acceptable misadjustment performance with lower computational and memory cost, provided the number of regressor vectors and filter length parameters are appropriately chosen, as compared to a distributed recursive-least-squares (RLS) based method.

Distributed power control algorithm for multiple access systems based on Verhulst model

In this paper the continuous Verhulst dynamic model is used to synthesize a new distributed power control algorithm (DPCA) for use in direct sequence code division multiple access (DS-CDMA) systems. The Verhulst model was initially designed to describe the population growth of biological species under food and physical space restrictions. The discretization of the corresponding differential equation is accomplished via the Euler numeric integration (ENI) method. Analytical convergence conditions for the proposed DPCA are also established. Several properties of the proposed recursive algorithm, such as Euclidean distance from optimum vector after convergence, convergence speed, normalized mean squared error (NSE), average power consumption per user, performance under dynamics channels, and implementation complexity aspects, are analyzed through simulations. The simulation results are compared with two other DPCAs: the classic algorithm derived by Foschini and Miljanic and the sigmoidal of Uykan and Koivo. Under estimated errors conditions, the proposed DPCA exhibits smaller discrepancy from the optimum power vector solution and better convergence (under fixed and adaptive convergence factor) than the classic and sigmoidal DPCAs. (C) 2010 Elsevier GmbH. All rights reserved.

Vector within-host feeding preference mediates transmission of a heterogeneously distributed pathogen

2. We documented the within-host distribution of two vector species that differ in transmission efficiency, the leafhoppers Draeculacephala minerva and Graphocephala atropunctata, and which are free to move throughout entirely caged alfalfa plants. The more efficient vector D. minerva fed preferentially at the base of the plant near the soil surface, whereas the less efficient G. atropunctata preferred overwhelming the top of the plant. 3. Next we documented X. fastidiosa heterogeneity in mechanically inoculated plants. Infection rates were up to 50% higher and mean bacterial population densities were 100-fold higher near the plant base than at the top or in the taproot. 4. Finally, we estimated transmission efficiency of the two leafhoppers when they were confined at either the base or top of inoculated alfalfa plants. Both vectors were inefficient when confined at the top of infected plants and were 20-60% more efficient when confined at the plant base. 5. These results show that vector transmission efficiency is determined by the interaction between leafhopper within-plant feeding behaviour and pathogen within-plant distribution. Fine-scale vector and pathogen overlap is likely to be a requirement generally for efficient transmission of vector-borne pathogens.