Coinbase is working on adding private transactions to its Layer 2 network base, CEO Brian Armstrong said in a post on X, adding more details will be shared in the near future.
The Armstrongs said Coinbase’s March 2025 acquisition of the team behind Iron Fish, a blockchain project known for building privacy-preserving technologies, was part of the transition to private transactions.
That team was folded into a new “privacy pod” in Base. While the Iron Fish blockchain and its token remained independent, the engineers who developed it are now working to create what the firm called “privacy-preserving primitives” for Base.
“Privacy is critical to unlocking the full potential of an onchain future,” Coinbase wrote in its original announcement.
Armstrong’s post comes at a time when interest in privacy coins is resurging after these suffered abuses around the world. Privacy-focused tokens like , and has risen this year, with ZEC alone rising 460% within the past 30 days.
Privacy coins have faced a crackdown over concerns about their potential use for illegal activities, as it becomes more difficult, if not impossible, to track funds on their networks.
Regulators in the EU and US have responded to their popularity by tightening anti-money laundering (AML) and counter-terrorist financing (CTF) rules, resulting in bans and delistings.
However, research shows that despite these concerns, only about 7% of privacy coin transactions were tied to suspected illegal activity. Instead, data suggests that liquidity is instead the primer for a currency’s use in illicit transactions, with data from Chainalysis showing that darknet market users reverted to BTC after XMR was delisted from Binance.
The firm’s data also showed that only about 0.14% of all cryptocurrency transactions involved illegal activity.
