For years, cryptocurrency firms have worked to demonstrate their safety to traditional banks. Yet even with significantly more regulatory frameworks in place than a few years ago, many of these companies still face rejection at the banking door.
Jelizaveta Paskovskaja, Money Laundering Reporting Officer (MLRO) at CryptoProcessing by Coinspaid, offers a clear explanation: regulation alone never automatically creates trust. It provides a framework, but banks and partners still need to understand how a crypto business actually operates before they can sign off.
Why De-Risking Persists
The gap between regulation and trust is why de-risking has persisted even as rulebooks have thickened. Many traditional institutions still find it easier to issue a flat refusal than to build a proper risk-based view of a crypto partner, Paskovskaja explains. While crypto firms have made real progress on their side, the problem sits with banks that prefer to avoid the work of assessment altogether.
What actually convinces a bank to say yes? Paskovskaja points to one core test: whether a company looks and behaves like a serious financial institution rather than a tech startup that happens to move money. Governance must be real, ownership clear enough for a bank's compliance team to map out quickly, and the compliance officer must have enough authority to slow down a risky deal.
Paperwork only gets a company so far. What persuades a bank is documented onboarding, timely escalations, regular review cycles, and proof that flagged issues actually get fixed rather than just logged. Transparency and consistency matter—a company that can clearly walk a bank through its products, customer base, risk exposure, and how it manages that risk earns confidence fast.
From Guesswork to Hard Evidence
The understanding of money laundering risk in crypto has grown rapidly. A few years ago, most conversations about crypto AML risk stayed vague. Now they get specific quickly, partly because the industry has matured and partly because regulators have become far more detailed in their expectations. In Europe, this shows up through MiCA, along with growing attention on sanctions, the Travel Rule, transaction monitoring, and source of funds expectations.
People in this space now talk about specific typologies, transaction patterns, sanctions exposure, wallet behavior, source of funds, and source of wealth—a real shift. The industry used to be judged mostly on assumptions; now it gets judged on facts.
What Banks Still Get Wrong
One assumption Paskovskaja keeps encountering is that crypto is automatically anonymous and impossible to trace. That isn't how blockchains actually work. Most transactions are pseudonymous rather than anonymous, and with the right analytics tools, they can usually be traced and properly analyzed.
Another misconception is that every crypto business is basically the same and deserves the same treatment. A licensed payments provider, a custodian, an exchange, and a peer-to-peer platform carry very different risk profiles and serve different customer bases. Their control setups look nothing alike. Lumping them into one bucket misses the point entirely.
There's also a belief that blockchain analytics alone can solve the whole problem. It's a genuinely important layer, Paskovskaja says, but it only works once it sits alongside KYC and KYB checks, sanctions screening, source of funds checks, ongoing monitoring, and strong governance.
Where Caution Turns Into Exclusion
Paskovskaja draws a clean line between legitimate risk management and excessive de-risking. Legitimate risk management means looking at a company on its own terms and managing whatever risk it actually carries. Excessive de-risking starts the moment an institution stops doing individual assessment and just excludes an entire category instead.
Picture a bank that turns down a fully licensed crypto payment provider purely because it operates in crypto. It never looks at who the firm's clients actually are or how its controls function. It doesn't even check whether the transaction monitoring holds up. That isn't risk management anymore—it's exclusion dressed up as caution. Over time, it doesn't make the financial system any safer; it just pushes activity toward less transparent channels.
What Real Compliance Looks Like
Heading into 2026, good compliance is proactive rather than reactive. It gets built into the business itself rather than bolted on afterward as an extra layer nobody really owns. In practice, that means strong governance, clear accountability, a risk assessment that stays current, robust onboarding, ongoing monitoring, solid sanctions controls, and a compliance team with enough standing to shape decisions rather than rubber-stamp them.
At CryptoProcessing by Coinspaid, this translates into a working routine rather than a policy binder gathering dust. Risk assessments get kept current instead of refreshed once a year for show. Onboarding runs on KYB checks. Customers and transactions get screened on a rolling basis. On-chain and off-chain activity gets watched side by side.
For investors, the takeaway is clear: the crypto-banking relationship remains a critical bottleneck. As regulatory frameworks like MiCA evolve, the real test for crypto firms will be proving credible governance and operational maturity—not just ticking compliance boxes. For related market context, see our coverage of AI and chip routs and AMC's share sale impact.
This article is for informational purposes only and does not constitute financial advice.
