Coinbase CEO Brian Armstrong said his team is moving closer toward making private stablecoin transactions possible on the Ethereum layer-2, Base, which could bring a much-needed boost to privacy on public blockchains.
“Base is building private transactions,” Armstrong said in a post to X on Tuesday, noting that Coinbase acquired crypto privacy platform Iron Fish in March to deliver on that mission.
Many respondents asked whether the privacy solution would mandate Know Your Client checks; however, Armstrong didn’t address those concerns, stating that more details would be shared soon.
Privacy-shielded crypto transactions are sought after by some as they protect user financial data, shield transactions from public scrutiny, and lower the risk of being targeted by hackers or scammers.
However, some of the crypto industry’s leading privacy innovators have been fiercely prosecuted, including Tornado Cash developers Alexey Pertsev and Roman Storm. as well as the Samourai Wallet founders, Keonne Rodriguez and William Lonergan Hill.
Iron Fish’s privacy solution isn’t fully private
However, Base’s transactions may not be fully private if it is based on Iron Fish’s current implementation.
According to Iron Fish’s website, the platform uses zero-knowledge proofs and “view keys” to keep transactions private, while still allowing data to be disclosed if a tax authority or other enforcement agency requests information.
Users receive these view keys when they create an account with Iron Fish, allowing them to pass on “read-only access” information to authorities should they come knocking on their door.
Iron Fish’s zk-proofs assist this effort by letting users prove something without revealing all of the information, just the necessary elements.
Related: Privacy is ‘constant battle’ between blockchain stakeholders and state
Iron Fish’s crypto privacy solution leverages crosschain bridge ChainPort, which also employs a real-time threat detection system to ensure that “only clean funds” enter the Iron Fish network.
Iron Fish already supports privacy transactions
Iron Fish already offers privacy solutions on over 20 blockchains, including Base, where it enables a privacy version of wrapped USDC (USDC) through ChainPort.
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