U.S. crypto exchange giant Coinbase has announced a set of new tools to aid crypto compliance procedures for financial institutions.
In an announcement on April 28, the company unveiled “Coinbase Intelligence” which it stated would provide crypto compliance at scale.
The firm added that it was particularly experienced in the challenge of keeping pace with global regulations and wants to make sure that everyone can safely participate in the crypto industry.
The newly announced tools will address the compliance needs of “financial institutions, crypto businesses, law enforcement agencies, and corporations new to crypto,” it stated.
The new suite of tools offers a service called Coinbase Know Your Transaction (KYT) which is a transaction screening tool. This will enable financial institutions and crypto businesses to “proactively manage risk based on our proprietary risk scoring system,” it explained.
The KYT service can be used as an API (application programmable interface) to automate real-time transaction monitoring. The goal is to safeguard against bad actors and spurious transactions.
In reality, bad actors would use a mixing or transaction obfuscation service such as Tornado Cash.
KYT also allows users to receive alerts to enable proactive risk management if there are changes to risk profiles and screen transactions for anti-money laundering-related flags.
The company has also changed its analytics platform to “Coinbase Tracer.” The platform, which has been used by governments and law enforcement agencies, now links activity to real-world entities to visualize the flow of crypto assets.
It can also be used to reduce fraud, demystify counterparty risk, and help flag AML risks with risk scores and alerts. The company concluded that it is on a mission to meet the compliance opportunities of the future.
“At Coinbase, we’ve championed the importance of growing the crypto market in a fair and compliant manner in order to fuel innovation and expand economic freedom for everyone.”
Is Coinbase becoming a bank?
The new tools may be welcomed by regulators and lawmakers, but for the average user, Coinbase is becoming more like a high street bank every day. In March, Coinbase stated that customers in Canada, Singapore, and Japan would be required to provide additional information about their transactions.
Most banks have limits on transactions, require rafts of personal information, report transactions back to the government, impose hefty fees, and restrict what their customers can do with their own money.
As the global regulators tighten the screws on the crypto industry, centralized exchanges will have little choice but to follow this path, and Coinbase appears to be leading the way. Company stock (COIN) fell to an all-time low of $115 on April 28.
BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.