The MLRO of CryptoProcessing discusses why access to banking remains the largest hurdle for the cryptocurrency sector.

      Crypto companies have spent years attempting to persuade banks that they are secure partners. Despite the increased regulations compared to a few years ago, many of these companies still face rejection. Jelizaveta Paskovskaja, Money Laundering Reporting Officer (MLRO) at CryptoProcessing by Coinspaid, clearly articulates the reason for these ongoing refusals. She asserts that regulation does not automatically engender trust; it provides a framework, but banks and partners must genuinely comprehend the operational mechanics of a crypto business before they approve it.

      Why a “No” Still Seems Easier

      This disparity between regulation and trust is the reason de-risking persists, even as regulations become more comprehensive. Paskovskaja notes that many conventional institutions find it simpler to refuse outright instead of developing a nuanced risk assessment of a crypto partner. Although crypto firms have made significant advancements, the challenge lies with banks that prefer to sidestep the assessment process entirely.

      What persuades a bank to approve a crypto firm? Jelizaveta highlights a fundamental criterion: the company must present itself and function like a legitimate financial institution rather than a tech startup merely transferring funds. Effective governance is essential, and ownership must be transparent enough for a bank’s compliance team to understand quickly. Furthermore, the person managing compliance within the crypto firm should have sufficient authority to halt questionable transactions.

      While documentation is important, what truly convinces banks are thorough onboarding processes, timely escalations, regular review cycles, and evidence that identified issues are actually resolved rather than just recorded. Transparency and consistency are critical; a firm capable of clearly explaining its products, clientele, risk exposure, and risk management strategies can quickly gain a bank's confidence.

      From Assumptions to Concrete Evidence

      Understanding the risks of money laundering in crypto has evolved rapidly. A few years ago, Jelizaveta remarks, discussions around crypto AML risks were often vague. Now, they quickly delve into specifics, fueled by the industry's maturation and regulators' more detailed expectations. In Europe, this is reflected in MiCA, along with a growing focus on sanctions, the Travel Rule, transaction monitoring, and source of funds requirements. Stakeholders now discuss specific typologies, transaction patterns, sanctions exposure, wallet behavior, and sources of funds and wealth, signaling a significant transformation. The industry is now evaluated primarily on facts rather than assumptions.

      Common Misconceptions About Crypto and Money Laundering

      One misconception that Jelizaveta frequently encounters is the belief that crypto is intrinsically anonymous and untraceable. This misrepresents how blockchains function; the majority of transactions are pseudonymous rather than fully anonymous, and with the right analytic tools, they can typically be traced and analyzed effectively.

      Another flawed conception is that all crypto businesses are essentially alike and should be treated uniformly. A licensed payments provider, custodian, exchange, and peer-to-peer platform can exhibit vastly different risk profiles and serve diverse customer segments, and their control measures differ significantly. Treating them all the same overlooks crucial distinctions.

      There’s also the notion that blockchain analytics by itself can resolve the entire issue. While it is an important component, Jelizaveta clarifies that it must complement KYC and KYB checks, sanctions screenings, source of funds assessments, ongoing monitoring, and robust governance.

      Where Caution Becomes Exclusion

      Paskovskaja clearly differentiates between effective risk management and excessive caution. Proper risk management entails evaluating a company based on its individual characteristics and addressing the specific risks it presents. In contrast, overzealous de-risking occurs when an institution opts not to conduct personalized assessments and instead excludes an entire category of businesses.

      Consider a bank that rejects a fully licensed crypto payment provider solely because it operates within the crypto sector. The bank doesn’t investigate the firm's clientele or its internal controls, nor does it assess the adequacy of its transaction monitoring. This practice shifts from risk management to exclusion, which over time does not enhance the safety of the financial system; it merely drives activity toward less transparent channels.

      What Effective Compliance Looks Like at CryptoProcessing by Coinspaid

      So, what constitutes good compliance for crypto businesses as we approach 2026, especially when the objective extends beyond merely preventing money laundering to fostering long-term institutional trust? Jelizaveta suggests that effective compliance is proactive, integrated into the business rather than added as a secondary layer with no clear ownership. This involves strong governance, explicit accountability, regularly updated risk assessments, comprehensive onboarding, ongoing monitoring, stringent sanctions controls, and a compliance team empowered to influence decisions rather than merely approve them retrospectively.

      At CryptoProcessing by Coinspaid, this translates into a routine functioning rather than a stagnant policy manual. Risk assessments are frequently updated instead of just revisited annually for appearances. Onboarding is driven by KYB processes. Customer and transaction screenings occur continuously. Both on-chain and off-chain activities are monitored in tandem, and escalation alerts follow pre-defined paths rather than being improvised. Controls evolve in