The rapid expansion of Layer 2 networks has changed the structure of on-chain activity. As of early 2024, networks like Arbitrum, Base, and Optimism aren’t just Ethereum extensions—they’re core components of the ecosystem.
With Crystal’s latest update, all investigative and compliance tools in our Expert platform are now available for ARB, BASE, and OP. That means full transaction tracing, monitoring, graph analysis, and case management on three of the most important L2 chains today.
Layer 2s aren’t side projects anymore—compliance teams need visibility
In January 2024, Coindesk reported that Layer 2 networks hit all-time highs in TVL, transaction count, and adoption, with Arbitrum and Optimism leading the charge and Base growing rapidly as Coinbase’s flagship L2.
This is great for users—but a challenge for compliance teams and investigators.
Illicit actors increasingly exploit L2s to route funds more cheaply and obscure traces. Yet many tools still lack full coverage of these chains, leaving risk professionals with critical blind spots.
Crystal now closes that gap.
What’s included in Crystal’s Layer 2 support
You can now:
- Add ARB, BASE, and OP transfers to Monitor to receive real-time alerts
- Trace addresses, wallets, and transactions in Visualization
- Use Explorer to investigate entities and assets on these chains
- Build and share cases involving L2 activity, including indirect exposure
All tools work just as they do for Bitcoin and Ethereum—with full clarity across three high-volume networks.
Regional insight: What this update unlocks around the world
United States
Enforcement rising, Base under the spotlight
With U.S. regulators ramping up scrutiny of crypto platforms, visibility into all parts of the Ethereum ecosystem—including L2s—is increasingly expected. This is especially true for Base, Coinbase’s in-house Layer 2, which has seen rapid TVL growth and DeFi integration.
- In 2023, the U.S. Treasury highlighted the risk of cross-chain and cross-layer laundering (FinCEN Advisory, Nov 2023).
- OFAC sanctions have also extended to addresses known to bridge across chains and layers.
Crystal now gives US-based VASPs and investigators the tools to trace L2 flows with the same precision as BTC or ETH.
Europe
MiCA and FATF push for deeper, end-to-end traceability
The EU’s Markets in Crypto-Assets (MiCA) regulation, going live in phases from 2024, includes AML mandates that require better transaction monitoring and record-keeping—especially for asset service providers.
At the same time, the FATF’s October 2023 review found that most jurisdictions still fall short in enforcing the Travel Rule and monitoring cross-chain activity (source).
Crystal’s update helps compliance teams and regulators in the EU:
- Detect risk exposure on emerging L2s
- Conduct full investigations without losing the thread when funds bridge off Ethereum
- Align with MiCA’s risk monitoring expectations
Asia-Pacific
Innovation meets heightened compliance standards
Asia continues to lead in crypto development, with jurisdictions like Singapore, Japan, and South Korea tightening controls while fostering innovation.
- MAS in Singapore has issued guidance urging VASPs to assess risk across all transaction pathways, including L2s and bridges.
- Japanese exchanges are under pressure to enhance transaction monitoring beyond Layer 1.
Crystal now supports APAC compliance and analytics teams working across these hybrid environments—especially those dealing with high-volume L2 usage among developers and consumers.
Latin America
High adoption, high risk, growing oversight
LATAM remains one of the world’s fastest-growing crypto markets, especially for stablecoins, remittances, and alternative finance. But that popularity comes with increased financial crime.
L2s are often used to reduce costs and move funds discreetly—making them attractive to ransomware groups and money laundering operations.
With this update, Crystal enables:
- More complete investigations across L2 rails
- Risk alerting for indirect connections
- Greater forensic visibility for law enforcement and private sector analysts in the region
MENA
Expanding crypto infrastructure under global pressure
Countries in the Gulf region have positioned themselves as pro-crypto hubs. But they’re also under international pressure to improve transparency and AML enforcement.
In 2024, the UAE was removed from the FATF gray list, signaling progress—but also an ongoing expectation of strict oversight. Full visibility into L2s like Arbitrum and Optimism strengthens local regulators’ ability to monitor cross-chain flows without losing sight of the details.
A unified view across the most-used L2s
This update isn’t about checking a box. It’s about giving investigators, compliance professionals, and regulators the tools they need to operate with confidence—wherever the funds move, and however actors try to conceal them.
As L2s go mainstream, Crystal delivers clarity.
