Coinbase CEO hints its new layer-2 community might embody AML measures

2 minutes, 34 seconds Read

Coinbase chief government Brian Armstrong has hinted that the agency’s new Layer-2 blockchain community Base could also be subjected to transaction monitoring and anti-money laundering measures at launch.

In an interview with Joe Weisenthal on Bloomberg Radio on Mar. 6, Armstrong acknowledged that Base has some centralized parts immediately, including “it is going to be increasingly decentralized over time.”

Nonetheless, he then steered that there might be transaction monitoring and AML necessities for customers of the brand new layer-2 community.

He steered that Coinbase may have a accountability when it comes to transaction monitoring within the early days, including:

“I feel that the centralized actors are those which are in all probability going to have probably the most accountability to keep away from cash laundering points and having transaction monitoring applications and issues like that.”

Armstrong’s feedback have been additionally highlighted up by decentralization advocate Chris Blec in a Twitter publish on Mar. 7.

Base is an Ethereum layer-2 community that gives a safe, low-cost, developer-friendly means for customers to construct decentralized apps, in accordance with Coinbase.

It’s being developed with the “OP Stack” utilized by Optimism which is able to allow high-speed transactions on Ethereum. Base was unveiled on Feb. 23 and is at present within the testnet part, Coinbase has but to offer a mainnet launch date however it’s anticipated in Q2, 2023.

Blec has beforehand warned about Coinbase’s newest layer-2 providing in a weblog publish launched in late February, 5 days after the agency introduced Base.

He stated that layer-2 infrastructure was fairly centralized as a result of they use “sequencers” that are “nodes that assemble and execute L2 blocks whereas transmitting customers’ actions from L2 to L1.”

Coinbase, a licensed cash transmitter, might be working the only real sequencer for Base. This raised the query of whether or not Base would additionally legally require know-your-customer (KYC) necessities making it the primary ever L2 to take action.

Associated: L2 is essential to Ethereum decentralization, censorship resistance, says researcher

Coinbase hasn’t confirmed or denied whether or not Base could be implementing KYC and AML measures. Blec commented:

“Isn’t it ironic that “DeFi” is heading towards being managed by the entities that it was initially imagined to be battling?”

Nonetheless, the crypto group and Ethereum advocates have stated Base was a “huge confidence vote” for Ethereum.

Cointelegraph reached out to Coinbase for remark however has not acquired a response by the point of publication.