Coinbase Advocates for Modernizing U.S. AML Laws with Technology
- Coinbase urges the U.S. Treasury to replace outdated anti-money-laundering rules with AI and zero-knowledge proofs.
- The exchange proposes safe harbors for AI use and recognition of decentralized IDs to reduce costly KYC duplication.
- Coin Center warns that traditional AML on stablecoins could lead to a “CBDC-style panopticon.”
- Coinbase highlights the high compliance costs as barriers for smaller financial service providers, affecting low-income customers.
- The letter states that over 25 million reports are filed annually to FinCEN, mostly on lawful activity, with minimal follow-up.
Coinbase is pushing for the modernization of U.S. anti-money-laundering laws by integrating advanced technologies like AI and zero-knowledge proofs to enhance compliance in digital assets. The exchange emphasizes the need for regulatory safe harbors and updated guidance from the Treasury to streamline processes and reduce unnecessary data sharing among financial institutions.
The proposal aims to address high compliance costs that hinder smaller providers and disproportionately affect low-income customers while ensuring more effective monitoring of illicit activities in the crypto space through innovative methods like Know-Your-Transaction screening and blockchain analytics clustering (Source).
