Coinbase US Policy Chief Find Path That Allows for Crypto Innovation says

• Coinbase wants to help policymakers come up with rules that protect consumers but also help institutions and people who are new to cryptocurrencies.
• Know-your-customer (KYC) policies are seen by many in the space as an invasion of privacy and a way for cybercriminals to find easy targets.
• CEO Brian Calvert says KYC policy is an area of regulation that crypto-natives and people who care about privacy still disagree on.

Governments around the world debate whether and how to regulate cryptocurrencies, the publicly traded exchange Coinbase wants to help policymakers come up with rules that protect consumers but also help institutions and people who are new to cryptocurrencies.

“What we’re trying to do is find a path that allows for crypto innovation to continue driving,” Coinbase Head of US Policy Kara Calvert told Decrypt. “We don’t want DeFi (decentralised finance) to die when it’s still young.”

Since the 2016-2017 bull market, when people became more aware of Bitcoin, DeFi, and other cryptocurrencies, regulators have had to play catch-up and try to use decades-old laws on new technology. Know-your-customer (KYC) policies are seen by many in the space as an invasion of privacy and a way for cybercriminals to find easy targets.

Calvert said that cooperation is the key to making these worries go away.

“I think what we need to do is we need to create rules of the road,” she said. “The industry as a whole could do a better job of getting feedback from “degens” and DeFi projects to make sure that policies work for them and don’t put them in a box or create barriers.”

Unpopular Opinion: KYC is not a good way to stop money laundering and crime, and all the information about innocent people who get caught in the dragnet is a moral hazard. That information will be stolen and used against people who did nothing wrong. More crimes happen because of the paradigm than it stops.

The largest cryptocurrency exchange in the U.S., Coinbase was started in 2012 and went public in 2021. Since then, the government has paid more attention to the company.

Calvert says that Coinbase is fine with regulation, but that “we just want to make it better.” KYC policy is an area of regulation that crypto-natives and people who care about privacy still disagree on.

The right way to look at this news is that it shows that AML/CTF and KYC don’t work. They will never work because they try to control the criminal act, not the tool. It’s not the money itself that’s illegal, but how it’s used to commit crimes.

KYC and Anti-Money Laundering (AML) are practises in the financial industry that make sure a client’s identity can be checked and used to stop or prosecute financial crimes.

For example, American banks and regulatory agencies like the Securities and Exchange Commission (SEC) usually don’t require customers to give detailed financial and personal information before opening an investment or bank account.

“There are some folks that will not want to be compliant with KYC, and they’ll go somewhere else,” Calvert said. “I think it shows that they really want to make it safe for people in the US to use crypto, and because of that, there will be rules.”