Coinbase Advocates for Blockchain and AI Integration in U.S. Anti-Money Laundering Efforts

In a significant move toward modernizing financial crime prevention, Coinbase's Chief Legal Officer Paul Grewal has formally urged the U.S. Treasury Department to integrate artificial intelligence and blockchain technology into its anti-money laundering (AML) frameworks. This recommendation comes in response to the Treasury's recent call for public comments regarding enhanced detection of illicit activities involving digital assets. Grewal's comprehensive letter emphasizes that current financial crime prevention methods are becoming increasingly inadequate against sophisticated digital asset-related crimes, necessitating technological evolution in regulatory approaches. The proposal highlights blockchain's inherent transparency features, which provide immutable audit trails, combined with AI's pattern recognition capabilities that can identify suspicious transactions more efficiently than traditional systems. This dual technological approach could potentially revolutionize how financial institutions and regulators monitor and prevent money laundering while maintaining compliance with existing regulations. Coinbase's position reflects the cryptocurrency industry's growing commitment to collaborating with regulators, demonstrating that blockchain technology can be part of the solution rather than the problem in financial crime prevention. The timing of this recommendation is particularly crucial as digital asset adoption continues to expand globally, creating both new opportunities and new challenges for financial surveillance systems. This initiative represents a proactive step toward creating a more secure and transparent digital financial ecosystem while addressing legitimate regulatory concerns about cryptocurrency-related illicit activities.

Coinbase Urges U.S. Treasury to Modernize AML with AI and Blockchain

Paul Grewal, Coinbase's chief legal officer, has called on the U.S. government to leverage blockchain and AI in combating cryptocurrency-related crimes. In an open letter to the Treasury, Grewal emphasized the need for innovation to match the evolving tactics of financial criminals. The letter responds to the Treasury's request for comment on detecting illicit digital asset activity.

Grewal's recommendations include amending the Bank Secrecy Act and updating identity verification rules. He advocates for AI-driven AML compliance and the use of zero-knowledge proofs. This marks another instance of Coinbase influencing crypto policy, following Grewal's criticism of Operation Choke Point 2.0 in 2024-2025.

Coinbase Pushes for Crypto Regulatory Reforms in U.S., Citing National Security and Innovation

Coinbase Global Inc. executives are intensifying their campaign for updated cryptocurrency regulations in the United States, framing the issue as critical to both national security and technological innovation. The exchange's leadership specifically targets revisions to the Bank Secrecy Act and digital identity rules, arguing current frameworks are inadequate for modern financial crime prevention.

Chief Legal Officer Paul Grewal outlined four key proposals in response to a U.S. Treasury request for input. The recommendations include creating regulatory SAFE harbors for AI-enhanced compliance systems and establishing API standards for data sharing. These measures aim to balance crime prevention with support for technological advancement in financial services.

The push coincides with broader fintech industry efforts to preserve open banking principles and consumer data rights. Coinbase's position reflects growing institutional consensus that clear crypto regulations could simultaneously strengthen law enforcement capabilities and foster financial innovation.

Coinbase's Base to Introduce Private Transactions Using Iron Fish's Zero-Knowledge Tech

Coinbase CEO Brian Armstrong revealed plans to integrate private transactions on Base, the exchange's ethereum layer-2 network. The feature will leverage zero-knowledge cryptography from Iron Fish, acquired by Coinbase in March 2025, enabling shielded transfers of assets like USDC.

The announcement ignited controversy among crypto users. Critics question how a KYC-regulated platform can deliver true financial privacy, particularly given Coinbase's history of data leaks. Iron Fish's view-key feature—which allows selective transparency—further complicates the privacy proposition.

Armstrong framed the MOVE as responding to growing demand for confidential stablecoin transactions. Yet the initiative walks a regulatory tightrope, balancing privacy aspirations with compliance requirements that have defined Coinbase's operations.