New open standard replaces opaque server logs with mathematically verifiable evidence, helping market participants meet EU AI Act and MiFID II transparency requirements
TOKYO–(BUSINESS WIRE)–The VeritasChain Standards Organization (VSO), an independent international standards body, today announced the global release of VeritasChain Protocol (VCP) v1.0, an open cryptographic audit protocol designed to provide mathematically provable transparency for AI‑driven and algorithmic trading systems.
VCP replaces mutable server logs with a tamper‑evident chain of cryptographic evidence, enabling regulators, brokers, exchanges and trading firms to move from trust‑based oversight to verification‑based supervision.
Why This Matters Now
The launch of VCP v1.0 comes at a pivotal moment for global market infrastructure:
- More than 80 proprietary trading firms collapsed between 2024 and 2025 amid regulatory scrutiny, opaque execution models and frozen payout disputes, leaving a trust gap between traders and platforms.
- Regulators worldwide are tightening expectations around algorithmic accountability — from U.S. enforcement actions against high‑risk retail FX schemes to the EU AI Act (high‑risk AI obligations effective in 2026) and MiFID II RTS 25/27/28 reforms on timestamp integrity and best execution.
- Algorithmic trading is estimated to exceed USD 20 trillion in annual notional volume, yet much of its decision‑making and execution remains difficult to audit in a rigorous, forensics‑grade way.
VCP addresses this structural “crisis of trust” by providing an immutable, end‑to‑end audit trail from AI signal generation and risk checks through to final execution.
About the VeritasChain Protocol (VCP)
VCP v1.0 introduces a regulation‑aligned audit architecture built on four foundational pillars.
1. Cryptographic Chain of Evidence
VCP creates an append‑only audit trail in which any insertion, deletion or modification becomes cryptographically detectable.
This is achieved through modern cryptographic and industry standards, including:
- Time‑ordered identifiers (UUIDv7)
- Canonical JSON data formats (RFC 8785)
- Hash chains and Merkle trees (RFC 6962)
- Digital signatures using Ed25519
Together, these mechanisms ensure that tampering cannot occur without immediate detection.
2. Full Lifecycle Logging
Standardized event types (including SIG, ORD, ACK, EXE, REJ, CXL) capture AI signals, governance metadata, risk checks, orders and executions in a unified model. This provides complete traceability from decision to outcome across heterogeneous trading systems.
3. Precision‑Safe Data
All monetary and quantitative values are stored as strings rather than floating‑point numbers, eliminating IEEE‑754 precision errors and ensuring audit‑grade numerical accuracy in legal and regulatory contexts.
4. Tiered Compliance Framework
VCP defines three implementation tiers to match different infrastructure profiles:
- Platinum – For exchanges and HFT environments, with PTPv2 time synchronization, nanosecond timestamps and SBE (Simple Binary Encoding).
- Gold – For institutional brokers and buy‑side firms, using NTP, microsecond precision and JSON transport.
- Silver – For retail and prop‑style environments, using best‑effort clock sync and non‑invasive sidecar logging suitable for MT4/MT5, white‑label platforms and other hosted systems.
Aligned With Global Regulations
VCP is designed as “compliance by design,” aligning with major regulatory regimes rather than treating reporting as an afterthought.
EU AI Act (High‑Risk AI)
The VCP‑GOV module records model identifiers, hashes, decision factors, confidence scores and human approval metadata. This helps firms meet Articles 12 (record‑keeping) and 13 (transparency) for high‑risk AI systems by providing a machine‑readable evidence trail for AI‑driven trading and risk engines.
MiFID II (RTS 25/27/28)
An explicit ClockSyncStatus field, together with immutable execution, slippage and latency attributes in VCP‑TRADE, supports clock‑synchronization requirements under RTS 25 and provides cryptographic evidence for best‑execution monitoring under RTS 27/28.
GDPR (Right to Erasure)
The VCP‑PRIVACY extension supports crypto‑shredding patterns, in which personal data is encrypted with per‑subject keys and erasure requests are satisfied by key destruction. This preserves the integrity of the audit chain while making encrypted personal data irretrievable.
Who VCP Serves (Pain to Solution)
Exchanges & Dark Pools
- Pain: Suspicion of internalization or front‑running, opaque matching logic.
- Solution: Cryptographic proof of price‑time priority and matching behavior without exposing full order‑book details.
FX/CFD Brokers and Market Makers
- Pain: Slippage disputes, questions around best execution and execution venues.
- Solution: Immutable evidence of execution prices, timestamps, slippage and latency, plus regulatory‑grade reporting feeds.
Proprietary Trading Firms & Retail Infrastructure Providers
- Pain: Payout controversies, shutdowns and an industry‑wide collapse in trader trust.
- Solution: Verification dashboards, VCP‑authenticated audit trails and cryptographic evidence that orders are handled according to disclosed rules.
Regulators & Supervisors
- Pain: Incomplete, inconsistent or tamperable logs that complicate investigations.
- Solution: Real‑time, machine‑readable, cryptographically anchored audit streams that reduce the cost and time required for forensic reconstruction.
Milestones Announced Today
As part of the v1.0 launch, VSO is announcing the following resources and programs:
- VCP v1.0 Specification released in English, Japanese and Chinese
- VCP Explorer API v1.1, providing Merkle proof verification and digital audit certificates
- VC‑Certified program, opening registration for organizations seeking technical compliance certification
- Three pilot integrations (including a brokerage and a prop trading firm, under NDA) adopting the Silver Tier implementation model
- Open‑source SDKs published on GitHub for multiple languages
Certification Scope Clarification (Important)
VC‑Certified is a technical compliance certification for conformance with the VeritasChain Protocol specification only.
It does not constitute, and must not be interpreted as, an assessment or endorsement of any certified entity’s:
- Financial soundness
- Regulatory status or licensing
- Business practices or risk management
- Investment quality or suitability
This clarification is consistent with VSO’s strict non‑endorsement and neutrality policy.
About VeritasChain Standards Organization (VSO)
The VeritasChain Standards Organization (VSO) is an independent, international standards body dedicated to establishing transparency, fairness and security in global algorithmic trading markets. Under the mission “Encoding Trust in the Algorithmic Age,” VSO develops and maintains the VeritasChain Protocol (VCP) and aligns its work with ISO/TC 68 financial‑services standards. Headquartered in Tokyo, VSO brings Japan’s regulatory discipline to global market infrastructure.
- Website: https://veritaschain.org
- GitHub: https://github.com/veritaschain
- Press Kit: https://veritaschain.org/press
Contacts
Media Contact
VeritasChain Standards Organization (VSO)
Email: [email protected]
