Coinbase Pushes for Zero-Knowledge Proofs in US Financial Compliance Overhaul

Coinbase has urged US lawmakers to modernize the Bank Secrecy Act by incorporating Zero-Knowledge Proofs (ZKPs) into financial compliance frameworks. Chief Legal Officer Paul Grewal emphasized ZKPs as a groundbreaking solution to improve transparency while protecting consumer privacy. He criticized the existing Know-Your-Customer (KYC) systems for their reliance on centralized databases, which are prone to security breaches. This proposal highlights Coinbase's commitment to advancing regulatory frameworks that balance innovation with security in the cryptocurrency sector.

Coinbase Advocates for Zero-Knowledge Proofs in US Financial Compliance

Coinbase has called on US lawmakers to update the Bank Secrecy Act by integrating Zero-Knowledge Proofs (ZKPs) into financial compliance frameworks. Chief Legal Officer Paul Grewal highlighted ZKPs as a tool to enhance transparency while safeguarding consumer privacy.

The current Know-Your-Customer (KYC) processes, Grewal argued, are fraught with security risks due to centralized databases vulnerable to breaches. ZKPs could allow users to verify identity or age without exposing underlying data, reducing unnecessary data aggregation and minimizing privacy risks for law-abiding citizens.

Grewal emphasized ZKPs' potential to streamline information sharing between financial institutions and regulators, ensuring compliance without compromising sensitive data. The proposal aligns with broader industry efforts to modernize financial infrastructure through cryptographic innovation.

Coinbase Downgraded to 'Sell' Amid Cooling Retail Interest

Compass Point analysts slashed Coinbase's rating from 'Neutral' to 'Sell,' citing waning retail enthusiasm and intensifying stablecoin competition. The investment bank cut its price target to $248 from $330 following the exchange's disappointing Q2 results, which revealed a 39% quarterly drop in transaction revenue to $764 million.

Despite a 1% intraday bump on Monday, Coinbase shares have tumbled 15% since last Thursday's earnings report. The stock now hovers NEAR $319, though it remains up 28% year-to-date. Subscription services—touted as a diversification play—also faltered, declining 6% sequentially to $656 million.

The downgrade underscores growing headwinds for crypto exchanges as speculative fervor wanes. Coinbase's reliance on volatile trading fees leaves it exposed to shifting market tides, with institutional products yet to fill the revenue gap.

Pantera Capital Leads $20M Funding Round for Decentralized Robotics OS

OpenMind, a startup developing a decentralized operating system for robots, has secured $20 million in a funding round led by Pantera Capital. The round saw participation from notable investors including Coinbase Ventures, DCG, Ribbit, and Lightspeed Faction. The firm aims to create FABRIC, an open-source coordination LAYER for robotic intelligence built on blockchain technology.

Stanford professor Jan Liphardt, CEO of OpenMind, likened the system to "Linux on Ethereum," emphasizing its role as a decentralized nervous system for smart machines. "Today’s robots are trapped in single-vendor ecosystems that limit collaboration," Liphardt noted. "OpenMind is the connective tissue the robotics industry has been missing."

The project highlights the growing synergy between crypto and robotics, with blockchain poised to address interoperability challenges in the field. By leveraging decentralized networks, OpenMind seeks to enable machines from diverse manufacturers to collaborate seamlessly.

Coinbase and PayPal Navigate GENIUS Act to Offer Stablecoin Rewards

Despite the GENIUS Act's prohibition on yield-bearing stablecoins, major U.S. firms like Coinbase and PayPal continue to offer customers 3% to 5% rewards on stablecoin deposits. The legislation, signed last month, targets issuers directly but leaves room for third-party arrangements.

Coinbase sidesteps the restriction by no longer issuing USDC, while PayPal delegates issuance of its stablecoin to an external partner. This legal maneuvering underscores the tension between regulatory frameworks and market innovation in the crypto sector.

The debate reflects broader questions about stablecoins' role—whether as payment instruments or investment vehicles. Industry leaders had pushed for yield-bearing structures during legislative discussions, but policymakers ultimately favored a more conservative approach.