Coinbase is advocating for a review of the Bank Secrecy Act to align it with the demands of the modern digital economy.
Reasons for BSA Modernization
Coinbase's Chief Legal Officer, Paul Grewal, noted that outdated compliance requirements hinder the identification of bad actors and the fight against illicit finance. He believes the law needs an overhaul to meet the realities of today's digital economy.
Zero-Knowledge Technologies as a Solution
Grewal proposed the use of zero-knowledge proofs (ZKPs) to safeguard user privacy. ZKPs allow for the verification of specific details, such as age or absence from sanctions lists, without revealing the underlying information. This could enhance security and reduce the risks of personal data leaks.
Commercial Challenges and Coinbase Stock Status
Grewal's statement came amid a 12% decline in Coinbase shares following the release of quarterly revenue figures that fell short of analysts' expectations. However, some experts believe that the current market dip presents opportunities for long-term investors.
The discussion on modernizing the Bank Secrecy Act and implementing zero-knowledge technologies highlights Coinbase's commitment to adapting its practices to new financial realities and enhancing user data protection.
