Coinbase Challenges Bank Secrecy Act with AI Proposal

Coinbase has submitted a 30-page opinion to the U.S. Treasury, critiquing current BSA regulations and suggesting innovative compliance solutions as of October 21, in Washington, D.C.

This proposal highlights Coinbase’s push for modern regulatory frameworks to advance cryptocurrency compliance, contrasting a Senate draft bill that challenges DeFi development.

Coinbase Pushes for AI-Driven Regulatory Reform

Coinbase suggested a modernization of Bank Secrecy Act regulations, urging the recognition of decentralized IDs and zero-knowledge proofs. The company emphasizes that the current regulations are outdated and inefficient, impacting data handling and compliance effectiveness. Coinbase proposes a “safe harbor” approach for AI and API monitoring tools, intending to enhance regulation through tech-driven methodologies. This initiative aims to foster a better collaborative environment with a regulatory sandbox for public-private cooperation, pushing for a reduction in low-value reporting. The company’s proposal stands as an alternative to a Senate bill perceived to target DeFi and crypto wallet development.

While there has not been an immediate market impact reported, the crypto community awaits any further clarifications or endorsements from regulators. Coinbase’s move underscores a strategy calling for innovation-centered reforms over restrictions that could hinder DeFi growth. However, no explicit market shifts or influential responses have been documented.

“Modernizing the Bank Secrecy Act is crucial for adapting to the rapidly evolving landscape of digital assets. We believe technology can enhance compliance and create a more effective regulatory framework.” — Paul Grewal, Chief Legal Officer, Coinbase

Ethereum Market Fluctuations Highlight Resilience Amid Regulatory Proposals

Did you know? Coinbase’s push for innovation echoes its 2023 call for blockchain’s inclusion in anti-money laundering discussions, highlighting its commitment to leading regulatory change through technology.

Ethereum (ETH), according to recent CoinMarketCap data, continues to dominate the market with a market cap of $480.49 billion, despite a 0.09% decrease in the last 24 hours and a sharper 6.23% decline over the past week. Trading volume notably climbed by 22.47% over the same period, reaching $40.29 billion. Such fluctuations illustrate ETH’s resilience in a turbulent market environment.

Insights from Coincu’s research team suggest that regulatory clarity driven by such proposals could bolster technological integration in compliance while safeguarding innovation. Historical trends point to the potential stabilization of markets if these tech-focused changes are adopted, fostering a more cooperative regulatory landscape.