Coinbase Urges AI & Blockchain Analytics in Crypto AML
Coinbase has submitted a 30-page response to the US Treasury under the GENIUS Act, calling for modernization of crypto AML compliance under the Bank Secrecy Act. The proposal recommends safe harbors for AI-driven and API-based blockchain analytics, integrating zero-knowledge proofs and decentralized identity to enhance privacy and reduce false positives. It also advocates know-your-transaction analytics to accurately trace digital asset flows and regulatory sandboxes to pilot public-private AML models. By emphasizing outcome-based guidelines over rigid mandates, Coinbase aims to reduce regulatory uncertainty, accelerate AI-powered transaction screening, and bolster detection of illicit crypto activity, ultimately helping exchanges scale compliance, foster innovation, and build confidence in crypto AML solutions.
Bullish
By proposing clear crypto AML guidelines and safe harbors for AI-driven blockchain analytics, Coinbase aims to reduce regulatory uncertainty and accelerate adoption of advanced compliance tools. This could foster greater institutional participation and market confidence, supporting higher demand for digital assets. In the short term, regulatory approval processes may not directly shift prices, but the long-term effect of improved oversight and innovation is likely bullish for the crypto sector.