Navigating Crypto Regulations

One of the first mistakes I made when launching my first regulated business was delegating compliance. I started with TransferTo, a mobile micro value transfer service, which wasn’t regulated. Eventually, TransferTo split into two branches (now DT One and Thunes), with the new branch handling actual money transfers that required regulatory compliance. At that time, I thought, "I'll hire a Chief Compliance Officer and let them set up the function," just as I did with marketing or tech. That was a mistake. I faced significant challenges in opening a bank account because I hadn't fully mastered my processes. I also had a hard time communicating with my compliance officer. I didn't have the words or the right codes. Regulatory compliance is ultimately the responsibility of the company and its leadership—it cannot be outsourced. As a CEO, I believe it's essential to make the effort to understand it because the risks for the company are too significant. The least severe risk is a fine. The moderate risk is a suspension of the license. The most severe risk is revocation, or even imprisonment. To effectively manage these risks, I believe it's the CEO's duty to establish the compliance framework. Get your hands dirty. Understand the mechanics. Then, the Chief Compliance Officer can execute your plan. And this is exactly what regulators expect. The CEO's ability to manage compliance is one of the key aspects they evaluate when you apply for a licence. They don't require you to know how to code, but they do expect you to fully understand your company's compliance. If I have one piece of advice for a fintech entrepreneur: invest in compliance. The stakes are too high. As a startup, it could destroy your business. As a scale-up, it could strongly hinder your growth.

The Financial Action Task Force (FATF) has released its Updated Recommendations (February 2025), reinforcing international standards on AML, CFT, and Combating the Financing of Proliferation (CFP). Key Highlights: ✅ Risk-Based Approach (RBA) Strengthened • Countries and financial institutions must continuously assess ML/TF risks. • Proliferation financing risks (linked to WMDs) must now be explicitly assessed and mitigated. • Greater emphasis on data-driven decision-making in risk management. ✅ Stronger Financial Crime Enforcement & Asset Recovery • Enhanced measures to identify, freeze, and confiscate illicit assets, even without conviction-based legal proceedings. • Countries must cooperate more effectively on cross-border investigations related to ML, terrorism, and sanctions evasion. • Expanded legal mandates for regulators to seize cryptocurrency-related assets used for illicit activities. ✅ Enhanced Corporate Transparency & Beneficial Ownership Regulations • Stricter disclosure requirements for companies and trusts to prevent anonymous ownership structures facilitating financial crime. • Introduction of centralized registries for beneficial ownership information, accessible by regulators and FIUs. • Bearer shares and nominee shareholder arrangements are further restricted due to their role in obfuscating ownership. ✅ New Standards for Virtual Assets & Emerging Technologies • FATF mandates stronger oversight on VASPs, aligning AML rules for crypto-assets with traditional financial institutions. • New tech-based compliance controls (including AI-driven monitoring) recommended to enhance financial crime detection. • Stricter regulations for cross-border virtual asset transactions to combat illicit financing and crypto-enabled ML. ✅ Expanded Measures Against Terrorist Financing & Sanctions Evasion • Countries must implement targeted financial sanctions to prevent terrorism and WMD proliferation financing. • NPOS are now required to assess their terrorist financing risks while ensuring legitimate operations are not disrupted. • Greater scrutiny on correspondent banking relationships to prevent facilitation of illicit transactions. ✅ Increased International Cooperation & Mutual Legal Assistance • FATF calls for faster cross-border financial intelligence sharing to prevent criminals from exploiting jurisdictional gaps. • Countries must align with UNSCRs on CTF and sanctions enforcement. Recommandations: 🔹 Implement advanced transaction monitoring using AI to detect suspicious financial activities more effectively. 🔹 Reinforce beneficial ownership compliance 🔹 Strengthen cross-border AML/CFT coordination by fostering partnerships between FIs, regulators, and law enforcement agencies. 🔹 Ensure robust oversight on virtual assets by applying FATF’s Travel Rule to cryptocurrency transactions and monitoring DeFi risks. #AML #FATF #FinancialCrime #Compliance #CryptoRegulation

I am deeply concerned. What’s coming in 2025 is going to be a nightmare for tax professionals, and most don’t even see it coming. The new Form 1099-DA and IRS crypto tax regulations will create one of the biggest compliance crises the tax industry has ever faced. Here’s the brutal truth: Most accountants are NOT equipped to handle crypto taxation. They lack the knowledge, the tools, and the experience to properly report complex transactions across centralized exchanges, DeFi platforms, NFT marketplaces, and self-custody wallets. And now, with the introduction of Form 1099-DA, things are about to get a lot worse. Why? Because Form 1099-DA will create a false sense of security. Many tax professionals will assume that the form provides all the information needed to report crypto transactions accurately - but it won’t. These forms will be issued only by centralized platforms and will likely fail to capture crucial details such as: ❌ Transfers between wallets and exchanges ❌ Transactions on DeFi platforms ❌ Staking rewards, airdrops, and forks ❌ NFTs and other non-traditional crypto assets ❌ Proper cost basis tracking This means that crypto investors who blindly rely on their 1099-DA, or worse, rely on accountants who don’t understand crypto will end up misreporting their taxes. The result? IRS audits, penalties, and massive tax bills for unsuspecting taxpayers. The Domino Effect 1️⃣ Clients will unknowingly file inaccurate returns. 2️⃣ The IRS will have their transaction data and flag discrepancies. 3️⃣ Tax professionals who don’t understand crypto will be blindsided. 4️⃣ Audits, penalties, and legal consequences will follow. This isn’t fear-mongering. This is reality for any tax professional who isn’t actively preparing for what’s coming. What Needs to Happen Now 🔹 Tax professionals must educate themselves on crypto taxation—urgently. 🔹 Firms need to adopt the right tools and workflows to handle complex crypto transactions. 🔹 Crypto investors need to stop assuming their accountants “have it handled” and start asking tough questions. I’ve been in this space for 8 years now, and I’ve seen firsthand how difficult crypto tax compliance is even without these new regulations. I can’t stress this enough: if you’re a tax professional and you aren’t preparing for these changes now, you’ll be in serious trouble next year. The IRS is watching. The rules are changing. The industry is shifting. Are you ready? Let’s talk about it.👇 #CryptoTax #1099DA #TaxRegulations #CryptoAccountants #IRS #TaxSeason #CryptoCompliance

👮♂️ Garantex, the notorious sanctioned crypto exchange taken down. Last week, Garantex—a notorious sanctioned crypto exchange—was taken down in a coordinated international crackdown by US and European law enforcement agencies. Earlier that day, Garantex announced on Telegram it was pausing operations after Tether froze $28 million USDT linked to its service. Hours later, its domain was seized. This is a big deal. Garantex has been a hotspot for illicit finance, from ransomware gangs to darknet markets, and Russian money laundering networks. Since it was sanctioned by US OhFac in April 2022, TRM Labs' analysis has found that Garantex is responsible for 70% of all crypto volumes associated with sanctioned entities worldwide. So, this takedown is a landmark moment for crypto sanctions. But, this is not the end of the story. Garantex is unlikely to disappear—it may rebrand, migrate, or spin off new entities to continue its illicit operations. Compliance teams must stay vigilant—while we may temporarily see fewer direct alerts related to Garantex, we should expect more indirect risk exposure as illicit actors move their funds to new wallets. Continuous monitoring, real-time intelligence, and robust risk mitigation strategies are paramount. As the illicit crypto ecosystem continues to evolve, compliance professionals, regulators, and law enforcement must work together to ensure that exchanges like Garantex cannot re-emerge under new names.

🔴 Clearstream, Bitstamp… and now Coinbase. Luxembourg is quickly establishing itself as a major blockchain hub in Europe👇 Just a week ago, Luxembourg made headlines by attracting Coinbase, despite the company initially favoring Ireland for its MiCA license. 🗣️ “The process began just before Christmas and was completed in around half a year,” Daniel Seifert, Regional Managing Director EMEA at Coinbase, told Blockstories. “We had an open mind on which country to apply in. Luxembourg was highly engaged and responsive from the beginning. It was clear they wanted to be a MiCA hub.” 🇫🇷 A source within the French administration added: “Since MiCA, Luxembourg has become significantly more pro-business, unlike more defensive countries such as France.” 👉 So why is Luxembourg accelerating so quickly? According to Harry Lars Ghillemyn, founder of Woud Law Firm: “Luxembourg has never aimed to rival global financial hubs like New York or London. Its strength lies in high-value niches like structured finance, cross-border funds, and sustainable investing, areas where it is a global leader. But to stay competitive, the country must now focus on sectors with long-term growth potential. The government is preparing for a shift to onchain financial infrastructure.” "Rather than chasing the full Web3 stack, Luxembourg is focused on attracting regulated, institutional-grade players, fully aligned with its financial DNA. Platforms like Bitstamp and Coinbase, with strong licensing and institutional strategies, fit this model perfectly." 📍Even before Coinbase, Luxembourg had already welcomed Clearstream and Bitstamp (now owned by Robinhood). It’s also home to Banking Circle, the only credit institution currently issuing a MiCA-compliant euro stablecoin (EURITE), under the supervision of the CSSF. And that’s also where Franklin Templeton registered its tokenized money market fund BENJI. 👉 And things are likely to accelerate in the coming months, as Standard Chartered is reportedly aiming to be regulated there as well… just like Binance, which already has a presence in the country 👀 All the details are in this week’s Institutional Briefing from Blockstories. To Subscribe, it’s in the first comment👇

Crypto regulation is no longer a wild frontier. It’s becoming global, structured — and strategic. The newly released PwC Global Crypto Regulation Report 2025 marks a regulatory turning point for digital assets. Here are some key takeaways worth your attention: 1) US Pivot: A clear shift away from “regulation by enforcement” toward well-defined frameworks. Spot Bitcoin & Ethereum ETFs are just the beginning — Staked ETFs are coming next. 2) MiCAR in Full Effect: The EU now has a single market for crypto. Authorization, whitepapers, and AML rules are now standard. 3) Stablecoins in Focus: Regulators worldwide are setting strict, but innovation-friendly rules. Europe treats them as payment tools, while the US signals support for bank-issued stablecoins. 4) DeFi Under the Microscope: Expect more scrutiny. Global regulators are applying “same risk, same rule” logic to lending, DEXs, and even mixing services. 5) Tokenization Rising: From pilot programs in the EU to SEC-CFTC coordination in the US, real-world asset tokenization is becoming a regulated frontier for capital markets. Regulatory clarity is no longer optional. Time to adapt, align, and build responsibly. #CryptoRegulation #MiCAR #Stablecoins #Tokenization #DeFi #DigitalAssets #Web3Policy #PwC #FutureOfFinance

Early-stage founders often treat finance and legal compliances as afterthoughts and consider them relevant only for late-stage companies. Compliance and fiduciary discipline should be ingrained in the startup's DNA right from the beginning. In this article, we highlight 7 common mistakes made by founders: 1. Not reconciling cash with P&L: Cash is the ultimate truth. While different business models require revenue recognition differently, cash is what decides the runway. Reconciling bank statements with cash balances indicated in financial statements is a fundamental control check that should never be overlooked. 2. Treating Compliance as a one time process: Compliance controls should not be reserved only for fundraising events. Founders must work on compliance every month at the minimum, or run the risk of too little too late. 3. Not balancing outsourcing and in-house capabilities: While it is acceptable to outsource compliance functions to external parties initially, it is essential to build these capabilities in-house as the company scales. Over-reliance on external parties can become a bottleneck in the long run, hindering agility and responsiveness to changing compliance requirements. 4. Not considering long-term impacts of ignoring compliance: Focusing solely on short-term cash flow optimisation without considering long-term impacts can be harmful. Ignoring long-term consequences may lead to lower employee morale and confidence in the startup. 5. Not factoring in the true cost of non-compliance: Compliance is often seen as a low-cost item, but the consequences of non-compliance can be significantly high once a breach occurs. Founders should be transparent with investors and advisors about compliance efforts and challenges. Treating compliance as a critical Board agenda item allows experienced Board members to guide and provide alternatives for prompt course correction. 6. Not staying informed on regulatory changes: The regulatory environment constantly evolves, and founders must remain aware of the latest updates. Being well-informed about regulatory changes can turn challenges into opportunities, such as accessing government subsidies, tax breaks, or lower tax rates. Proactive awareness of regulatory changes can give the startup a competitive edge. 7. Not driving improvement of reporting quality: Quality reporting is an ongoing journey for startups. Founders should understand that reporting is not a one-time task; it requires constant improvement. In the fast-paced and ever-evolving startup ecosystem, finance and legal compliances are crucial in ensuring a company's success and growth. By incorporating best practices and avoiding common compliance mistakes, founders can position their startups for sustainable growth and build a strong foundation for success. Shashank Singh Divij Gupta, CFA Nikhil Patil #compliance #financialdiscipline #earlystagestartups #earlystageinvesting

2nd Global Cryptoasset Regulatory Landscape Study by University of Cambridge and Swiss Secretariat of Economic Affairs SECO The global #Blockchain and #Cryptoasset landscape is evolving rapidly, with regulators facing the challenge of balancing financial innovation and risk mitigation. The Cambridge Centre for Alternative Finance (CCAF) has released its second comprehensive study on the #Cryptoasset regulatory environment, analyzing approaches across 19 jurisdictions. Key Findings: 🔹 Diverse Regulatory Approaches Regulatory frameworks remain highly fragmented, with some jurisdictions embracing bespoke regulations while others retrofit existing frameworks. Some Emerging Markets and Developing Economies (EMDEs) continue to impose bans, often due to concerns about currency substitution and capital outflows. 🔹 Stablecoins & Market Integrity #Stablecoins are a key focus for regulators, with Advanced Economies (AEs) leading regulatory developments. While ensuring stability and redeemability remains a priority, approaches to reserves and governance structures vary significantly. 🔹 Classification & Definitions Remain Inconsistent Jurisdictions differ on terminology—terms like "cryptoasset", "virtual asset", and "digital asset" are used inconsistently. Many regulators prioritize consumer protection and classify cryptoassets as speculative investments rather than currencies. 🔹 Licensing & Compliance for Cryptoasset Service Providers (CASPs) Regulators are tightening requirements for #FinTech firms offering staking services, custody, and exchange operations. Some jurisdictions mandate that a share of customer cryptoassets be stored in cold wallets for security purposes. 🔹 Anti-Money Laundering (AML) & Consumer Protection AML compliance remains a regulatory priority, with most jurisdictions aligning with FATF standards. Measures such as blacklists of non-licensed firms, advertising restrictions, and financial literacy initiatives are being deployed to protect retail investors. 🔹 Future Outlook: Regulation of DeFi & Tokenization The study highlights early regulatory initiatives around Decentralized Finance (DeFi) and the tokenization of financial instruments, though regulatory frameworks in these areas remain nascent. Authors & Contributors: 📄 Research Team: Hugo Coelho (Principal Researcher), Alexander Apostolides, Keith Bear, Nick Clark, Natalia Cordeiro de Lima Fleichman, Kalliopi Letsiou, Aarvi Singh, Bryan Zhang 🔍 Reviewers & Contributors: Parma Bains (IMF), Cristina Cuervo (IMF), Nobuyasu Sugimoto (IMF), Jon Frost (BIS), Jamere McIntosh (BIS), Nico Hess (FINMA), Yann Thorens (FINMA), Gabrielle Inzirillo (ADGM), Dr Rhys Bollen (ASIC), David Halperin (ASIC), Joachim Schwerin (European Commission), Thomas Puschmann (Global Center for Sustainable Digital Finance, Stanford & Zurich University), Dea Markova (Forefront), Charles Kerrigan (CMS), Mike Ringer (CMS), Gabriel R. Bizama (University of Bern). #Blockchain #FinTech #DeFi

Compliance culture: Built in, not bolted on—and it starts at the top Because “We’ll fix it later” is not a strategy Let’s get something straight: 👉 #Compliance isn’t Legal’s job. It’s everyone’s job. And it starts with the CEO. If you treat compliance like the department that ruins good ideas, you’ll build a team that hides problems, skips guardrails, and prays no one notices. If you treat compliance like a growth enabler—like the quiet power behind trust, scale, and survival— You’ll build a culture that wins in the long game. And make no mistake: that mindset starts at the top. 🧠 What I’ve learned leading regulated companies I’ve led startups in digital assets, capital markets, wealth management—you name it. All regulated. All fast-moving. And here’s what I’ve learned: 👉 You can’t bolt on compliance. You have to build it in. From day one. Not Series B. Not when a regulator shows up. From the first product sprint, the first client onboarded, the first jurisdiction explored. According to a 2023 McKinsey report, startups that embed compliance early are 3x more likely to achieve regulatory approval in new markets without delays—and raise more capital with fewer legal caveats. 🛠️ How you build a compliance-first culture You don’t need to turn your company into a law firm. You need to build muscle memory. Here’s what I do at every company I lead: 1. Normalize escalation. If it smells weird, flag it. We don’t punish red flags—we reward them. 2. Involve compliance early. Not at the end of a build. They sit at the table from Day 0. 3. Treat regulators like stakeholders. You don’t hide from them—you build with them. 4. Celebrate risk ownership. When someone raises their hand and says “We can’t launch this yet”—that’s leadership. 5. Keep a regulatory log. Not sexy. But powerful. Consistency and clarity beat charisma when the regulator calls. 💡 It’s a culture problem, not a compliance problem If your team sees compliance as the department of “no,” that’s on you. Because the best cultures don’t just comply with the rules—they own them. They understand that compliance isn’t what slows you down— It’s what keeps you from getting shut down. As CEO, your job isn’t just to ship product, raise capital, or win deals. 🥊 Your job is to build a company that can survive its own growth. That means embedding compliance in your culture like it's oxygen— Silent, ever-present, and essential. You don’t just lead compliance with policies. You lead it with posture. And that posture starts with you. #CEO #Compliance #FinTech #Regulation #RiskManagement #Leadership #Trust #FinancialTechnology #Regulations #CEOs #Management

For nearly a decade, stablecoins were seen as crypto-adjacent tools—mostly confined to trading desks and DeFi protocols. But that narrative is shifting fast. A recent McKinsey article underscores why 2025 may be the tipping point. With over $250B in stablecoins issued, and $27T+ in annual on-chain transactions, the infrastructure, regulation, and institutional appetite are finally aligning. 📈 What’s driving the shift? Regulatory momentum: The GENIUS Act (US) and MiCA (EU) now provide legal clarity on reserves, issuance, and compliance—critical for mass adoption. Institutional traction: JPMorgan’s JPM Coin now moves $1B+ daily. Projects like mBridge, Guardian, and Canton are reshaping FX and capital markets with tokenized cash. Infrastructure maturity: Layer-2s (e.g. Arbitrum, Optimism), qualified custodians, and on-chain AML/KYC analytics (TRM, Chainalysis) are making stablecoins enterprise-grade. 🧾 Key Drivers: Speed: Near-instant vs. 1–5 day settlement on legacy rails Cost: <$0.01 per txn vs. $15–$50 for cross-border wires Availability: 24x7x365 global uptime Transparency & programmability: On-chain compliance, escrow, jurisdiction locks (e.g. MAS’s Purpose Bound Money initiative) 🏦 For financial institutions, the call to action is clear: Start issuing or integrating with stablecoins—or risk irrelevance. Build wallet, custody, liquidity, and token issuance infrastructure—or find partners quickly. Rethink the fractional-reserve model, deposit flow management, and FX monetization. Explore yield-bearing stablecoins as programmable treasury vehicles. In markets with unstable currencies, stablecoins are already emerging as the de facto reserve currency. In institutional finance, they’re powering on-chain settlement for T-bills, repos, and structured debt. McKinsey estimates that daily stablecoin transactions could exceed $250B by 2028, rivaling card networks and clearing systems. The risk? Sitting out while others define the future of cross-border flows and real-time treasury. Article: https://lnkd.in/gR3sSRKH #payments #stablecoins #financialservices #banking #innovation