Crypto Compliance Guide for Businesses
As cryptocurrency moves into the mainstream, regulatory requirements are evolving rapidly. This guide covers the key compliance frameworks affecting crypto businesses.
The Compliance Landscape
Why Compliance Matters
- Avoid regulatory penalties
- Build customer trust
- Enable institutional partnerships
- Prepare for audits
- Reduce operational risk
Key Regulatory Bodies
- SEC (US Securities)
- CFTC (US Commodities)
- FinCEN (US Financial Crimes)
- ESMA (EU Securities)
- National regulators (per country)
MiCA (Markets in Crypto-Assets)
The EU’s comprehensive crypto regulation framework.
Overview
MiCA establishes:
- Licensing requirements for crypto-asset service providers
- Consumer protection rules
- Market integrity standards
- Prudential requirements
Who Must Comply
- Crypto exchanges
- Custodial wallet providers
- Trading platforms
- Issuers of crypto-assets
- Stablecoin issuers
Key Requirements
- Authorization: Obtain license from national regulator
- Governance: Establish proper management structures
- Capital: Meet capital requirements
- Custody: Segregate and protect client assets
- Transparency: White papers and disclosures
→ Read more: Complete MiCA Compliance Guide
SOC 2 Compliance
Service Organization Control 2 for crypto companies.
Trust Service Criteria
- Security: Protection against unauthorized access
- Availability: System availability commitments
- Processing Integrity: Accurate, timely processing
- Confidentiality: Protecting confidential information
- Privacy: Personal information handling
Type I vs Type II
- Type I: Controls at a point in time
- Type II: Controls over a period (minimum 6 months)
Crypto-Specific Considerations
- Wallet security controls
- Key management procedures
- Transaction monitoring
- Incident response
→ Read more: SOC 2 for Crypto Companies
AML/CTF Requirements
Anti-Money Laundering and Counter-Terrorism Financing.
Know Your Customer (KYC)
- Identity verification
- Document collection
- Ongoing monitoring
- Risk assessment
Transaction Monitoring
- Suspicious activity detection
- Large transaction reporting
- Pattern analysis
- Alert management
Sanctions Screening
- OFAC compliance (US)
- EU sanctions lists
- UN designations
- Continuous screening
Audit Preparation
What Auditors Look For
- Complete transaction records
- Cost basis documentation
- Control environment
- Policy documentation
- Management representations
Building Audit Trails
Essential documentation:
- Transaction logs with hashes
- Wallet address ownership proof
- Exchange account records
- Decision documentation
- Change logs
Common Audit Issues
- Missing transactions
- Incorrect cost basis
- Unsubstantiated positions
- Control weaknesses
- Incomplete documentation
→ Read more: Crypto Audit Preparation Checklist
DORA (Digital Operational Resilience Act)
EU regulation for ICT risk management.
Key Requirements
- ICT risk management framework
- ICT incident reporting
- Digital operational resilience testing
- Third-party risk management
Impact on Crypto
Applies to:
- Crypto-asset service providers under MiCA
- Critical third-party providers
- Related financial entities
Building a Compliance Program
Step 1: Risk Assessment
- Identify applicable regulations
- Assess current gaps
- Prioritize remediation
- Document decisions
Step 2: Policy Development
- Transaction monitoring policies
- KYC/AML procedures
- Record retention policies
- Incident response plans
Step 3: Control Implementation
- Technical controls
- Operational procedures
- Monitoring systems
- Training programs
Step 4: Ongoing Monitoring
- Regular control testing
- Policy updates
- Regulatory monitoring
- Continuous improvement
Technology for Compliance
Modern compliance requires technology:
- Audit Logging: Immutable, tamper-proof logs
- Transaction Monitoring: Automated screening
- Reporting: Regulatory report generation
- Documentation: Centralized record-keeping
Coincile provides enterprise-grade audit logs with blockchain-style integrity verification.