Coinbase recently submitted a letter to the U.S. Treasury Department, urging the government to employ blockchain analysis, artificial intelligence, and other modern technologies to combat financial crime in the crypto space. Chief Legal Officer Paul Grewal noted in the October 17 letter that as money laundering schemes become increasingly sophisticated, law enforcement agencies need to employ appropriate technological tools to combat them.

Coinbase has suggested that the government provide regulatory exemptions under the Bank Secrecy Act for companies using AI and API monitoring tools, and issue guidance recognizing decentralized identity and zero-knowledge proofs as effective forms of customer verification. Meanwhile, Jim Harper, a senior fellow at the American Enterprise Institute, a think tank, has proposed establishing a communication system that would allow law enforcement agencies to directly request investigative information from crypto companies, thereby reducing the existing extensive and expensive financial surveillance system. (Cointelegraph)