A novel blockchain-based smart contract framework is proposed and designed to mitigate financial product fraud by enhancing transparency, auditability, and trust in advisory processes. The framework introduces a unique dual-contract architecture that combines product and authorization smart contracts, along with a challenge-response verification protocol that ensures both product authenticity and advisor legitimacy. The system is implemented and tested on the Ethereum blockchain, demonstrating operational feasibility through real-world transaction simulations and a corresponding gas cost analysis. By leveraging immutability, the framework preserves data integrity, while cryptographic signatures enable privacy protection without exposing sensitive data on-chain. It is designed to support multi-institutional environments, allowing various financial institutions to issue products and authorize advisors under a unified, fraud-resistant platform. Experimental results confirm the system’s effectiveness in preventing common fraud scenarios, while maintaining low transaction costs and high security.
Xiong et al. (Thu,) studied this question.