Coinbase Rolls Out Coinbase Intelligence to Tackle Global Regulatory Demands

Key Insights:

• This week, Coinbase announces a new Coinbase Intelligence product to navigate the global regulatory landscape.
• Coinbase aims to deliver trust and client protection with a robust platform aligned with regulatory requirements.
• Last week, Coinbase launched CoinbaseNFT, its NFT marketplace, amidst increased digital asset scrutiny.

Coinbase, a leading crypto exchange, is no stranger to scrutiny. In March, Coinbase users filed a claim against the exchange, for allegedly selling securities illegally.

The lawsuit came amidst increased news coverage of the SEC case against Ripple (XRP), ongoing since December 2020.

Coinbase is not alone in facing scrutiny, with Binance and other leading crypto exchanges frequently facing the wrath of regulators.

With regulatory uncertainty an issue for crypto platforms, Coinbase looks to address the expectations of investors and regulators, and Coinbase users.

Coinbase Launches Coinbase Intelligence to Tackle Regulatory Risk

On Thursday, Coinbase announced the launch of Coinbase Intelligence. Coinbase developed Coinbase Intelligence to address the compliance needs of crypto businesses, financial institutions, law enforcement agencies, and new-to-crypto companies.

The product suite aims to “secure the crypto economy from bad actors.” As part of Coinbase Intelligence, Coinbase is introducing,

“A new product, Coinbase Know Your Transaction (KYT), and providing an update of our existing product, Coinbase Analytics.”

Coinbase goes on to say,

“As the largest regulated exchange in the US, it has been critical for us to work on the development of safeguards against bad actors.”

Coinbase KYT enables businesses to

• Automate real-time transaction monitoring for millions of transactions by generating risk scores for addresses.
• Receive alerts to enable proactive risk management if there are any changes to risk profiles.
• Easily configure rule engines and unique risk insights into existing third-party case management tools.
• Screen transactions for anti-terror financing and other AML-related flags at scale.

The key features of Coinbase Tracer, previously called Coinbase Analytics, include

• Link activity to real-world entities and visualize the flow of funds using public attribution data.
• Reduce fraud, demystify counterparty risk, and help flag AML risks with sophisticated risk scores and alerts.
• Identify action points for intervention with seamless integrations with other case management tools and transaction monitoring systems.
• Utilize product capabilities designed in partnership with our world-class investigations team.

The introduction of Coinbase Intelligence comes amidst increased regulatory scrutiny in the US and overseas.

In Expansion Mode, Exchanges Focus on Regulatory Compliance

Last year, Coinbase announced that the SEC wanted to sue them over their “Coinbase Lend” program. As a result of the SEC’s intentions, Coinbase shelved the Lend program.

With regulatory scrutiny on the rise amidst the increasing adoption of crypto and the evolution of Web3, Coinbase is focusing on regulatory compliance.

This year, Coinbase has beefed up its regulatory division. In January, Coinbase hired Thaya Knight as senior public policy manager. Knight worked with Commissioner Elad Roisman and was counsel for SEC Commissioner Hester Peirce.

Coinbase aligns with other crypto exchanges, including Binance, which have beefed up compliance teams to tackle increased regulatory scrutiny.