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Coinbase Urges US Treasury to Leverage Blockchain, AI to Combat Crypto Crime

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Coinbase has known as on the US Treasury Department to modernize anti-money-laundering (AML) rules, saying decades-old frameworks just like the Bank Secrecy Act (BSA) are now not efficient in addressing the quickly evolving world of digital finance.

Key Takeaways:

  • Coinbase is urging the US Treasury to replace outdated AML guidelines, arguing that present frameworks fail to tackle dangers.
  • The firm recommends utilizing AI, APIs, and blockchain analytics to detect illicit exercise extra successfully.
  • Coinbase proposes regulatory sandboxes and secure harbors to encourage innovation.

Instead of counting on stricter enforcement, the corporate argues that innovation by means of blockchain analytics and synthetic intelligence ought to kind the muse of future monetary crime prevention.

“When unhealthy guys innovate in monetary crime, good guys want innovation to hold tempo,” stated Paul Grewal, Coinbase’s Chief Legal Officer, in an X post accompanying the exchange’s 30-page response to Treasury’s request for touch upon “Innovative Methods to Detect Illicit Activity Involving Digital Assets.”

Coinbase Calls US AML Rules Outdated

Coinbase’s submitting describes the present AML system as outdated and inefficient, noting that it usually floods regulators with low-value reviews whereas forcing corporations to retailer extreme quantities of buyer knowledge.

The firm claims this strategy each compromises privateness and fails to deter subtle legal operations.

Instead, Coinbase proposes a results-driven strategy that leverages fashionable applied sciences to enhance monitoring and enforcement.

Among its key suggestions, Coinbase urged Treasury to set up regulatory “secure harbors” for firms utilizing AI and API-driven compliance instruments, acknowledge decentralized IDs and zero-knowledge proofs as authentic types of buyer verification, and promote know-your-transaction (KYT) blockchain analytics as a superior various to conventional reporting.

“Blockchain and different progressive applied sciences can counter these rising dangers,” Grewal wrote, including that Treasury ought to actively promote the adoption of digital instruments to determine and deter illicit exercise.

He stated this is able to align with the targets of the Anti-Money Laundering Act of 2020, which sought to modernize the BSA.

Coinbase additionally known as for regulatory sandboxes to permit exchanges and businesses to collectively take a look at compliance improvements earlier than formal implementation.

The firm believes public–personal collaboration may speed up progress and supply clearer steering for corporations in search of to deploy AI or blockchain-based instruments in AML methods.

Faryar Shirzad, Coinbase’s Chief Policy Officer, echoed this sentiment, writing that the federal government ought to “observe within the footsteps of crypto exchanges” by embracing innovation quite than resisting it.

“Modernize AML with confirmed digital instruments like AI, APIs, digital IDs, and blockchain analytics,” he urged.

Top Crypto CEOs to Meet Senate Democrats as Crypto Bill Talks Stall

As reported, a high-profile meeting between leading crypto executives and Senate Democrats is ready for Wednesday, led by Senator Kirsten Gillibrand, in an effort to revive progress on long-delayed U.S. crypto market construction laws.

Gillibrand, one of many few Democrats vocal about offering regulatory readability for digital property, co-sponsored the Responsible Financial Innovation Act with Senator Cynthia Lummis and has remained a central determine in bipartisan crypto coverage efforts.

Executives from Coinbase, Chainlink, Ripple, Galaxy Digital, Uniswap, Circle, Kraken, a16z Crypto, Jito, and the Solana Policy Institute are anticipated to attend the closed-door roundtable, in accordance to journalist Eleanor Terrett.

The discussions come amid deep partisan divides in Congress, with competing payments from Democrats and Republicans outlining completely different visions for regulating crypto property and assigning oversight to the SEC and CFTC.

The put up Coinbase Urges US Treasury to Leverage Blockchain, AI to Combat Crypto Crime appeared first on Cryptonews.

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