The MLRO of CryptoProcessing discusses why access to banking remains the most significant hurdle for cryptocurrency.

      Cryptocurrency companies have spent years trying to persuade banks that they are safe business partners. Despite increased regulations compared to a few years ago, many of these companies still face rejections. Jelizaveta Paskovskaja, Money Laundering Reporting Officer (MLRO) at CryptoProcessing by Coinspaid, offers a clear reason for these continued refusals. She explains that regulation on its own does not automatically establish trust; it provides a framework, but banks and partners need to feel they truly understand how a cryptocurrency business operates before agreeing to work with them.

      Why a “No” Often Prevails Over Doing the Necessary Work

      The divide between regulation and trust is precisely why de-risking persists, even as regulatory guidelines expand. Many traditional institutions find it simpler to issue outright refusals than to create a comprehensive risk-based assessment of a crypto partner, according to Paskovskaja. While crypto companies have made significant strides, the issue lies with banks that prefer to avoid the effort of thorough evaluation altogether.

      So, what actually persuades banks to say yes? Jelizaveta highlights a crucial factor: whether a company presents itself and acts like a legitimate financial institution instead of merely a tech startup that processes transactions. Genuine governance is essential. Bank compliance teams must be able to clarify ownership structures quickly. Additionally, the individual managing compliance within the crypto firm should possess enough authority to prevent risky deals from progressing.

      While paperwork is important, what truly convinces banks is well-documented onboarding processes, timely escalations, regular reviews, and evidence that issues raised are genuinely resolved rather than just recorded. Transparency and consistency are key. A company that can clearly articulate its products, customer base, risk exposure, and risk management strategies earns trust rapidly.

      From Speculation to Concrete Evidence

      The understanding of money laundering risks in the cryptocurrency sector has evolved significantly. A few years ago, discussions about AML risks in crypto were often vague; now, they tend to be quite detailed. This shift is driven both by the maturing of the industry and by regulators providing more specific expectations. In Europe, this manifests through the Markets in Crypto-Assets (MiCA) regulation, alongside heightened scrutiny on sanctions, the Travel Rule, transaction monitoring, and source of funds requirements. Industry professionals now discuss specific typologies, transaction patterns, sanctions exposure, wallet behaviors, sources of funds, and wealth, marking a substantial change in how the sector is evaluated—from assumptions to factual assessments.

      Common Misconceptions Banks Have About Crypto and Money Laundering

      One persistent misconception that Jelizaveta encounters is the belief that cryptocurrencies are inherently anonymous and impossible to trace. This misrepresents the functioning of blockchains, where most transactions are pseudonymous and can generally be tracked and analyzed using the right analytics tools.

      Another incorrect notion is that all crypto businesses are fundamentally the same and should be treated uniformly. A licensed payment provider, a custodian, an exchange, and a peer-to-peer platform all have distinct risk profiles and serve varied customer bases, with significantly different control structures. Grouping them together overlooks critical differences.

      Additionally, some believe that blockchain analytics alone can address all risks. While this element is vital, it must be integrated with KYC and KYB checks, sanctions screening, source of funds verification, ongoing monitoring, and robust governance to be effective.

      Where Caution Transforms Into Exclusion

      There is a critical distinction between properly managing risk and overreacting to it, as highlighted by Paskovskaja. Effective risk management involves assessing a company based on its unique circumstances and addressing its specific risks. Overzealous de-risking begins when an institution opts not to conduct individual assessments and instead excludes an entire category of businesses.

      Consider a bank that rejects a fully licensed crypto payment provider solely based on its crypto operations, without evaluating the firm’s clients or its control mechanisms, and without verifying the effectiveness of its transaction monitoring. This approach ceases to be about risk management and becomes exclusion disguised as caution, which ultimately does not enhance the safety of the financial system; instead, it drives activity to less transparent channels.

      What Good Compliance Looks Like at CryptoProcessing by Coinspaid

      Looking ahead to 2026, what does effective crypto compliance entail as the focus shifts from merely preventing money laundering to fostering long-term institutional trust? According to Jelizaveta, effective compliance is proactive rather than reactive. It should be an integral part of the business rather than an afterthought. This includes strong governance, clear accountability, up-to-date risk assessments, thorough onboarding, continuous monitoring, robust sanctions controls, and a compliance team with sufficient authority to influence decisions rather than merely endorsing them post-factum.

      At CryptoProcessing by Coinspaid, this translates into regular routines rather than stagnant policy documents. Risk assessments are consistently updated, not just once a year for appearances. Onboarding relies on comprehensive KYB checks, with customers and transactions screened continuously. Both on-chain and off-chain activities are monitored together, and alerts