Coinbase Announces Plan to Introduce Privacy Transactions on Layer-2 'Base'

Brian Armstrong, Coinbase's chief executive officer (CEO), said his company's Ethereum (ETH) layer-2 network 'Base (BASE)' will introduce a privacy (anonymity) transaction feature.

On the 22nd (local time), according to Cointelegraph, Armstrong said "Base is building private transactions," and "this will be implemented through Iron Fish, the cryptocurrency privacy platform acquired in March."

He did not mention specific regulatory responses or whether 'know-your-customer (KYC)' procedures would be applied, and only said, "We will disclose additional details soon."

Privacy transactions are seen as a feature that protects users' financial information and can reduce third-party tracking or hacking risks. However, regulatory pressure surrounding such technologies is also intensifying. In the United States, Tornado Cash developers Alexey Pertsev and Roman Storm, and a co-founder of Samourai Wallet have been indicted on charges of aiding money laundering.

However, Base's privacy feature is unlikely to be implemented as fully anonymous transactions. Iron Fish is designed with zero-knowledge proofs (Zero-Knowledge Proofs) technology and a 'view key (View Key)' function to allow tax authorities or law enforcement to inspect transaction records when necessary.