Who Audits the Auditor? Tamper-Proof Fraud Detection with Blockchain-Anchored Explainable ML
For enterprise fraud detection, this work provides a tamper-evident audit trail to prevent insider manipulation, addressing a critical trust issue.
The paper addresses the trust gap in enterprise fraud detection where insiders can tamper with audit logs, proposing a system that anchors ML predictions and workflow execution to an immutable blockchain ledger. The system achieves competitive accuracy (F1=0.895, PR-AUC=0.974) with sub-25 ms latency and under $0.01 per transaction on Layer-2 networks.
In enterprise fraud detection, model accuracy alone is insufficient when insiders can tamper with audit logs or bypass approval workflows. Real-world incidents show that fraud often persists not because detection algorithms fail, but because the audit trail itself is controllable by privileged operators. This exposes a fundamental trust gap: *who audits the auditor?* We present a tamper-evident fraud detection system that anchors both ML predictions and workflow execution to an immutable blockchain ledger. Rather than using blockchain as passive storage, we enforce the entire approval process through smart contracts, ensuring that every transaction, prediction, and explanation is atomically recorded and cannot be retroactively modified. Our detection module achieves competitive accuracy (F1 = 0.895, PR-AUC = 0.974) while providing cryptographically verifiable decision trails that support regulatory auditability requirements (e.g., GDPR Article 22). System evaluation shows sub-25 ms inference latency and economically viable deployment on Layer-2 networks at under \$0.01 per transaction (validated against PolygonScan data), supporting enterprise-scale workloads of 10,000+ monthly payments.