Coinbase Introduces KYC-Verified Liquidity Pools for DeFi Swaps and Trades

Crypto exchange Coinbase announced on Tuesday the launch of Verified Pools, a new service it claims reduces counterparty risk for decentralized finance (DeFi) participants. 

Verified Pools are liquidity pools—collections of funds that facilitate digital asset trades—only available to users who complete Coinbase’s identity verification process. 

The service is designed for institutional and retail traders, offering KYC-verified liquidity pools to maintain what Coinbase is positioning as the openness and efficiency of on-chain markets, according to a statement.

Verified Pools is powered by Coinbase's Ethereum-centric Layer 2 network, Base, and utilizes the Uniswap v4 protocol. The exchange has also partnered with Gauntlet, a risk management firm, to shore up liquidity.

The pools are non-custodial, meaning users maintain control over their assets.

The KYC element is part of Coinbase's broader efforts to remain compliant as it seeks to scale back access to some offerings, particularly in New York.

Verified Pools are connected via Coinbase's "institutional-grade" Prime Onchain Wallet, Coinbase Wallet, or any other wallet stamped with a Coinbase Verifications credential, it said. 

Initially, Verified Pools will be available in select regions, including the U.S., Singapore, Netherlands, British Virgin Islands, Cayman Islands, and Channel Islands.

Users must complete Coinbase’s KYC process to participate, providing a higher level of assurance for institutions that have hesitated to join DeFi markets due to concerns over regulatory compliance and security.

Coinbase appears to be in a favorable position these days under President Donald Trump’s administration, which is en route to making the country the “crypto capital” of the world with pro-crypto policies.

After a years-long legal battle, the U.S. Securities and Exchange Commission (SEC) recently dropped its lawsuit against the exchange, clearing the way for Coinbase to operate more freely in the country.

Aside from Verified Pools, Coinbase revealed plans to offer 24/7 Bitcoin and Ethereum futures trading on its Coinbase Derivatives platform in the coming weeks.

Coinbase also announced it will launch perpetual-style futures in the U.S., with extended expiration dates, further expanding its futures trading options.

Edited by Sebastian Sinclair