TSECHACKS25_CodeBreakers

Fraud-Chain

User Registration & Authentication

1. User chooses login method:
   • Option 1: Traditional signup (email/password stored in DB)
   • Option 2: Metamask login (Web3 authentication)
2. If traditional login, user binds a Metamask wallet for blockchain interactions.
3. Role-Based Access: Users (borrowers), Banks (lenders), Admins (platform control).

Loan Application Process

1. User applies for a loan by selecting a bank.
2. Loan details (amount, interest, duration) are encrypted using AES + RSA/ECC.
   • User encrypts loan details with their key.
   • Bank & app hold the decryption key for access.
3. The encrypted loan request is written to the blockchain as a new block.
4. The bank reviews & approves/rejects via a smart contract.
   • If approved, funds are released to the borrower.
   • If rejected, the block is updated with rejection status.

Loan Repayment & Tracking

1. Each installment payment is recorded on the blockchain as a transaction within the same block.
2. User makes a monthly repayment using Metamask (crypto) or fiat via an off-chain bridge.
3. Smart contract:
   • Updates remaining loan balance.
   • Calculates penalties for late payments.
   • Checks if the borrower has defaulted.

Default Prevention & Risk Registry

1. If a borrower misses multiple payments, their block is updated with a defaulter flag.
2. Defaulter’s wallet address is added to the risk registry.
3. Smart contract automatically blocks defaulters from applying for new loans at any bank.

Data Privacy & Security

• All loan details are encrypted before writing to the blockchain.
• Only banks & authorized entities can decrypt loan data.
• Zero-Knowledge Proofs (ZKPs) allow banks to verify risk status without exposing full details.

Regulatory Compliance & Auditing

1. Regulators can request decryption access via a multi-signature approval mechanism.
2. Every action (loan approval, payment, default) has an immutable audit trail.

This markdown file describes the entire process of a blockchain-based loan management system with encryption, authentication, and defaulter tracking.