Coinbase CEO Brian Armstrong announced that Base is building private transactions after acquiring the Iron Fish team in March 2025, sparking questions about how privacy features will coexist with the exchange’s regulated business model.
Armstrong stated, “Base is building private transactions. We acquired the Iron Fish team back in Mar 2025 to start working on this. More to share soon.”
The announcement drew mixed reactions from the crypto community, with some questioning why a centralized exchange would promote privacy features while others celebrated the move as essential infrastructure development.
Community responses ranged from skepticism to enthusiasm, with users asking, “why would a CEX promote this?” and “Why don’t you just fight regulations for KYC? Instead you’d rather build semi private but compliant systems?“
Others predicted that “privacy as a base layer feature changes everything for stablecoin infrastructure,” while critics warned about potential risks of money laundering.
The announcement comes as the Coin Center submitted extensive comments to the Treasury, urging the issuance of privacy-preserving stablecoins on zero-knowledge blockchains rather than creating what the advocacy group describes as a “financial panopticon.”
Treasury Faces Pressure on Stablecoin Privacy Framework
Coin Center Executive Director Peter Van Valkenburgh submitted detailed comments to Treasury’s request for information on stablecoins, privacy, and surveillance, arguing that “stablecoins on public chains with traditional AML = CBDC style panopticon.”
The nonprofit urged Treasury to encourage stablecoin issuance on privacy-preserving chains and support privacy tools like Privacy Pools on public chains, warning that forcing traditional AML surveillance into public stablecoin transactions “creates a financial panopticon that’s just as bad, if not worse, for American’s privacy than a hypothetical CBDC could be.”
Coin Center proposed that Treasury permit alternative customer onboarding using verifiable digital credentials that meet NIST Identity Assurance Level 2 standards, rather than requiring the repeated collection of personal information.
The organization advocated for attribute-based proofs that reveal only compliance-relevant details, such as “U.S. person” or “not on the OFAC list,” while omitting personally identifiable information.
Van Valkenburgh emphasized that “universal view keys for stablecoin issuance on privacy preserving chains recreates the panopticon problem” and should be rejected.
The advocacy group warned that freeze and seize powers at stablecoin issuers “will inevitably have issues with false positives—innocent Americans digitally debanked” and argued these powers “cannot constitutionally be used on Americans or their assets without a warrant.”
Coin Center proposed smart-contract-mediated freeze controls designed to rapidly correct obvious false positives while preserving due process.
The organization estimates that less than 0.2% of criminal proceeds are ultimately intercepted through current AML enforcement despite U.S. financial institutions spending roughly $26 billion annually on compliance.
Privacy Wave Builds
The Ethereum Foundation announced the formation of a 47-member Privacy Cluster earlier this month, building on efforts that began in 2018 through the Privacy and Scaling Explorations team.
The initiative addresses five critical areas, including private transactions without surveillance, private data verification, selective identity disclosure, privacy experience improvements, and institutional adoption.
The Foundation warned that without robust privacy protections, Ethereum risks becoming “the backbone of global surveillance rather than global freedom.“
Just recently, Ethereum co-founder Vitalik Buterin published research on GKR, a cryptographic technique that can verify 2 million calculations per second on regular laptops and check entire Ethereum transactions using just fifty consumer-grade graphics cards.
Traditional methods require computers to perform 100 times more work than the original calculation, but GKR reduces this to just 10-15 times more work.
The breakthrough enables faster verification, cheaper transactions, and better privacy by checking only beginning inputs and final outputs rather than every calculation step.
Industry expert Petro Golovko from British Gold Trust had also previously argued that public blockchains expose salaries, business deals, and account balances, making crypto “unusable for regular people and impossible for institutions.”
He stated that “transparency is useful for auditing, not for living. A system where your employer, competitors, or even strangers can see your balance is not transparent—it’s unlivable.”
Golovko compared current blockchain transparency to the 1990s internet before encryption became standard, warning that “without privacy, crypto remains a casino, not a monetary system.”
Notably, the push for privacy is growing, while Tornado Cash developers Roman Storm and Alexey Pertsev are still facing a legal battle over their privacy-preserving blockchain.
The Ethereum Foundation and Keyring Network recently launched a fundraising effort in October, following Storm’s conviction on one criminal charge in August.
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