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

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According to reports, Brian Armstrong, CEO of Coinbase, said that the company\’s newly launched Ethereum L2 Network Base might take transaction monitoring and a…

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

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, one of the largest cryptocurrency exchanges in the world, recently launched its Ethereum L2 Network Base. The CEO, Brian Armstrong, said that while the platform will have some “centralized components”, it will gradually become more decentralized with time. However, he also mentioned that the platform is accountable for transaction monitoring currently, implying that there may be some centralization for this aspect of the system.

This could mean that despite being open to all developers, Base could become the central hub for products on Coinbase’s chain. Currently, it is unclear how the system will integrate with Coinbase’s existing products, but it is possible that any existing systems integrated with Coinbase and Base will maintain their original KYC/AML measures.

This move by Coinbase is significant, given that the focus on transaction monitoring and anti-money laundering measures has drastically increased in the crypto space. Law and regulatory bodies across the world have raised concerns about the possibility of anonymity in transactions, enabling the possibility of using cryptocurrency for criminal activities such as the financing of terrorism and other illegal activities.

Implementing transaction monitoring and anti-money laundering measures could help Coinbase and its Ethereum L2 Network Base to comply with regulatory requirements and gain more trust from the government, blockchain enthusiasts, and the wider financial industry.

However, the move may not be welcomed by some blockchain enthusiasts as centralization goes against the ethos of decentralization in the industry. It remains to be seen how Coinbase will balance the need for centralized monitoring measures while also remaining true to the decentralized values of the blockchain.

In conclusion, Coinbase’s launch of its Ethereum L2 Network Base and the possibility of implementing transaction monitoring and anti-money laundering measures signals the willingness of the crypto industry to comply with regulatory requirements and gain trust from governmental bodies. The move also highlights the need for the blockchain industry to find a balance between centralization and decentralization as the industry continues to mature.

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