🚨 COINBASE TELLS U.S. TREASURY OLD AML RULES ARE “BROKEN” 🚨
Coinbase has publicly urged the U.S. Department of the Treasury to overhaul its anti-money laundering (AML) framework, calling current laws outdated and ineffective for both the crypto economy and traditional financial crime prevention.
🔑 Key Points
🔹 Coinbase’s Position: In a 30-page submission, the exchange argued that the Bank Secrecy Act and related AML rules—written decades before blockchain existed—are “broken” and overly reliant on manual reporting, which generates large volumes of low-value data instead of actionable intelligence.
🔹 Tech-Driven Solutions: Coinbase proposed a “safe harbor” system to encourage use of AI, APIs, and blockchain-based Know Your Transaction (KYT) tools for real-time analytics and crime detection. The company also advocated adoption of decentralized identity (DID) and zero-knowledge proofs for privacy-preserving customer verification.
🔹 Policy Reform Recommendations:
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Replace bulk Suspicious Activity Reports (SARs) with targeted, high-signal reporting.
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Establish public–private data-sharing sandboxes to coordinate regulators, banks, and crypto firms.
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Recognize AI and blockchain-led compliance methods as equivalent to conventional AML models.
🔹 Treasury Consultation: The proposal was made in response to the Treasury’s request for public comment on modernizing AML programs to align with digital asset innovation and emerging technology.
💡 Why It Matters
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Efficiency and Security: Coinbase argues that next-generation compliance tech can reduce compliance costs while improving law enforcement outcomes.
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Innovation-Friendly Regulation: The proposal urges regulators to embrace technology-neutral rules that recognize blockchain’s transparency as a AML strength, not a weakness.
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Industry Influence: This marks one of the most comprehensive calls for regulatory modernization from a major U.S. crypto exchange, likely shaping forthcoming Treasury and FinCEN adjustments to AML rules.
Coinbase’s proposal reframes anti-financial-crime regulation for the digital era—arguing that AI, real-time blockchain analytics, and decentralized identity can outperform legacy AML enforcement models.
https://decrypt.co/345137/coinbase-treasury-aml-rules-broken-pushes-tech-fixes-crypto-crime