If you are fundraising, read on
If you are fundraising, read on
You’ve just secured funding—congrats. But here's the reality check: crypto founders are under growing AML scrutiny, especially with new stablecoin laws and global AML regimes in motion. Ignoring this isn’t an option.
Why AML must be a founder's priority?
→ Regulation is catching up fast
In the U.S., the GENIUS Act and STABLE Act are set to bring stablecoins firmly under the Bank Secrecy Act, meaning crypto firms must now meet KYC, transaction monitoring, and Travel Rule obligations.
→ Global risk-focused regulation is the trend
The FATF’s risk-based approach expects crypto VASPs to conduct detailed risk assessments and diligence on customers and transactions.
→ Missed compliance can destroy you
Non-compliance isn’t just a fine—it can mean the end. Think of BitMEX: its founders were convicted for willfully ignoring AML rules, facing probation and fines.
→ Key takeaway
As a founder, treating AML as an afterthought exposes your company to real, existential risks.
Starting strong: Your AML foundations
→ Step 1: Understand your regulatory landscape
Conduct a risk assessment tailored to your business model - identify high-risk transaction types, geographies, or protocols (e.g., DeFi or mixing services).
→ Step 2: Write a live AML playbook (Not a PDF)
Your AML policy must be dynamic. Cover: onboarding, KYC, transaction monitoring, escalation/SARs, record retention, and ongoing audits.
→ Step 3: Automate KYC & AML controls
Deploy reliable tools - eKYC: platforms like Onfido, Trulioo for identity verification.
Blockchain analytics: Chainalysis, Elliptic for monitoring suspicious transactions.
Pro tip: Design onboarding flows that minimise friction while embedding compliance checks. This boosts conversions and trust.
→ Step 4: Monitor & alert in real time
Use real-time transaction monitoring to flag unusual activity based on size, speed, or destination (e.g., mixing services, blacklisted wallets).
→ Step 5: Train your team
Compliance isn’t only the officer’s job. Run regular training on red flag indicators, updating them as threats evolve.
→ Step 6: Review & adapt
AML isn’t "set and forget". Conduct periodic internal audits, update your playbook, refine risk thresholds, especially as regulations advance.
Real-world example – DeFi compliance step-by-step
Let’s walk the walk using a hypothetical DeFi protocol -
1. Risk Assessment: Determine that pseudonymous smart-contract use and cross-chain bridging elevate risk.
2. Policy Design: Write rules enforcing KYC on large liquidity additions, pairing that with on-chain analytics alerts.
3. Tooling: Integrate on-chain analytics (e.g., Chainalysis) + eKYC for identity checks.
4. Monitoring: Set alert thresholds when funds flow from high-risk networks or wallets to your protocol.
5. Action: Flag suspicious behaviour, freeze funds, and trigger SAR as needed.
It’s a simple compliance backbone, but in a new risk landscape.
Building a crypto startup today means building trust from day one
Your AML program shouldn’t be a box to tick, it should be a competitive advantage. When you automate compliance with smart UX, you signal credibility to users, investors, and regulators alike.
In a space where legal scrutiny is rising (think stablecoin regulation, Travel Rule enforcement₋2018), your survival depends on being proactive, not reactive. Balance trust and ease. Don’t let compliance slow you down, it should speed you up.
Need help translating this into UX-first policy or onboarding flow? Get a FREE consultation