Coinbase CEO Brian Armstrong revealed that the company’s new Layer 2 Network, Base, may implement Anti-Money Laundering (AML) and transaction monitoring measures for all interactions.
On March 6th, the Coinbase CEO attended an interview on Bloomberg Radio, where he revealed that it currently holds several centralized features. However, Armstrong added that Base is set to become “more and more decentralized over time.”
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The CEO highlighted that Coinbase is obligated to monitor transactions and apply AML requirements from an early of its Layer 2 network. Brian Armstrong added:
I think that the centralized actors are the ones that are probably going to have the most responsibility to avoid money laundering issues and having transaction monitoring programs and things like that.
However, not everyone was happy about Brian Armstrong’s ideas. Decentralization advocate Chris Blec expressed his concerns regarding Armstrong’s comments on Twitter.
Armstrong added that while Base is open to developers, it will form an important component of all products on the platform. According to him, all Coinbase products that connect with Base would retain their previous KYC/AML safeguards.
Base was unveiled on February 23rd by Coinbase on Twitter. The Layer 2 blockchain network is created in collaboration with Optimist, an existing L2 Ethereum protocol. Coinbase will be a core developer at Optimism and use the OP Stack.
The network will be interoperable with other L2 Ethereum networks and compatible with L1 networks like Solana. Base is still in the testnet phase. Therefore, it is unclear when it will see daylight.
by Gile K. – Crypto Analyst, BitDegree
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