Coinbase has recently written to the U.S. Treasury, suggesting it to adopt advanced technologies to tackle money laundering crimes. Coinbase’s chief legal officer, Paul Grewal said that blockchain analytics and Artificial Intelligence (AI) can help curb instances of financial crimes.
Grewal said that AI can be deployed to improve the monitoring of financial transactions, particularly over those that include digital assets.
The Coinbase letter to the U.S. Treasury advised that the Bank Secrecy Act (BSA) should be amended to include the use of advanced technologies. The BSA, established in 1970, requires financial institutions to help government agencies detect and prevent money laundering, terrorist financing, and other financial crimes.
“Amend the Bank Secrecy Act’s customer identification requirements to include decentralized identification and zero-knowledge proofs as part of an approved identification verification process,” Grewal noted.
Amid the ongoing crypto policy overhaul around the world, the requirement of Know-Your-Customer (KYC) and Know-Your-Transaction (KYT) details have emerged as a common mandate across jurisdictions. Users of financial and crypto platforms are required to provide their names, government documents, and other personal details to verify their identities and transactions.
Coinbase has said that the U.S. government must publish guidance that incentivizes the use of KYC and KYT screening as an effective way to process anti-money laundering compliance.
The exchange’s correspondence with the U.S. Treasury was in response to Executive Order 14178 that invites feedbacks on the “Strengthening American Leadership in Digital Financial Technology.”