Coinbase’s Ethereum L2 Network Base to Implement Transaction Monitoring and AML Measures

03/07/2023 00:55 • AI & Tech Insights • 106 views

According to reports, Brian Armstrong, CEO of Coinbase, said that the company’s newly launched Ethereum L2 Network Base might take transaction monitoring and anti-money laundering measures. He said that Base will have some “centralized components”, but it will become more and more decentralized as time goes by. Now it needs to be responsible for transaction monitoring, which means that although Base will be open to all developers, it will eventually become the “headquarters of products on the Coinbase chain”. It is speculated that any existing products integrated by Coinbase and Base will maintain their original KYC/AML measures. （Cryptoslate）

Coinbase CEO: Base may take transaction monitoring and anti-money laundering measures

Interpretation of the news:

Coinbase, the world’s leading cryptocurrency exchange, has recently launched its Ethereum L2 Network Base, which is expected to provide faster and cheaper transactions compared to the Ethereum mainnet. However, there are mixed opinions about the level of decentralization of this new network, and whether it will resort to centralized components to fulfill its transaction monitoring and anti-money laundering obligations.

According to Brian Armstrong, CEO of Coinbase, the new network will initially have some centralized components but will gradually become more decentralized over time. Currently, the network needs to implement transaction monitoring and anti-money laundering measures, which will be responsible for ensuring compliance with applicable regulations. This means that although Base will be open to all developers, it will eventually become the “headquarters of products on the Coinbase chain.”

However, some analysts have expressed concern over the centralized features of the Coinbase’s Ethereum L2 Network Base. While the network is expected to provide the necessary speed and scalability to support a multitude of decentralized applications, the introduction of centralized components raises questions about the identity and privacy of users.

Although Coinbase is known for its robust Know Your Customer (KYC) and AML procedures, questions remain on how its Ethereum L2 Network Base will integrate these measures. It is speculated that any existing products integrated by Coinbase and Base will maintain their original KYC/AML measures.

In conclusion, Coinbase’s Ethereum L2 Network Base is a much-anticipated development in the cryptocurrency space, promising to provide faster and cheaper transactions. However, its implementation of centralized components to fulfill transaction monitoring and anti-money laundering obligations raises concerns about its decentralization and user privacy. As Coinbase expands its services, it will be interesting to observe how the new network will integrate and balance decentralized features with compliance measures.

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Coinbase’s Ethereum L2 Network Base to Implement Transaction Monitoring and AML Measures

Coinbase CEO: Base may take transaction monitoring and anti-money laundering measures

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