CoinbaseCEO Bobby Armstrong hinted that a new second-tier blockchain system, Base, could be subject to transaction monitoring and anti-money laundering countermeasures at launch.

In an interview with Bloomberg Radio's Joe Wiesenthal on March 6, Armstrong acknowledged that Base has some centralized components today, adding that it will become more decentralized over time.

But he went on to propose that there are transaction monitoring and anti-money laundering rules for consumers of a new layer 2 Internet.

He suggested that Coinbase would initially undertake transaction monitoring, adding:

"I think the intensive participants are likely to have the most obligation to prevent the problem of money laundering, to make transaction monitoring plans, and so on."

Charles Sayer Dean, an advocate of the government procurement process, tweeted Armstrong's words on March 7.

According to Coinbase, Base is an Ethernet layer 2 network that provides users with a secure, cost-effective, developer-friendly way to build distributed applications.

It is working with the "OP Stack" used by optimists to develop the design, which will enable fast trading in the ether. Base appeared on February 23rd and is currently in the testing network. Coinbase does not give a release date for the medium-sized model, but plans to release it in the second quarter of 2023.

Blec issued a warning about the latest second-tier launch of Coinbase in an online article released at the end of February, five days after the company announced Base.

The second layer of infrastructure is very centralized because it uses a "sequencer", that is, "structure and execute L2 block connection points, while transmitting user operations from L2 to L1," he said. "

Coinbase is a certified money transmitter and the only sequencer operated by Base. This raises the question of whether Base will still reasonably and legally dictate the needs of your KYC, making it the first L2 to do so so far.

Coinbase does not confirm or deny whether Base will implement KYC and AML countermeasures. Seal Dean commented:

"isn't it ironic that Defi' is moving towards being manipulated by a physical line that is supposed to fight it?"

However, advocates of the cryptographic world and ethernet say that Base should be a "large-scale vote of confidence" for ethernet.

Cointelegraph contacted Coinbase for comment, but had not received a text message as of press time.