https://tradersunion.com/news/cryptocurrency-news/show/705487-coinbase-urges-u-s-treasury/

Coinbase has called on the U.S. Department of the Treasury to revise decades-old anti-money laundering (AML) regulations, arguing that innovation — not stricter oversight — is the key to combating illicit finance in digital assets.

The company urged the Treasury to establish “safe harbors” for firms leveraging AI- and blockchain-based analytics, stating that technology-driven compliance would reduce costs and improve accuracy.

As part of its efforts to modernize the Bank Secrecy Act (BSA) through innovation, the Treasury invited industry participants to submit proposals. In response, Coinbase advocated for stronger public-private collaboration through regulatory sandboxes, allowing exchanges and agencies to test new compliance models before rules are formally enacted.

Coinbase emphasized that reforms should be outcome-focused rather than rule-heavy, noting that existing BSA requirements overload regulators with low-value reports and force companies to collect and store excessive customer data.

The Bank Secrecy Act is no longer fit for purpose

In its statement, Coinbase argued that the Bank Secrecy Act, enacted in 1970 and requiring financial institutions to report suspicious transactions to the government, has become outdated and counterproductive, exposing personal consumer data while doing little to stop criminal networks.

According to The Block, Washington policymakers are currently debating how far new crypto oversight should go. Democrats on the Senate Banking Committee recently circulated a draft proposal aimed at curbing illegal activity in decentralized finance (DeFi). The measure drew criticism from Republicans and industry leaders, who warned it could “effectively ban” DeFi development and wallet innovation in the U.S.