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Compliance for Crypto and Digital Asset Firms

Compliance priorities for crypto and digital asset firms

Regulated crypto and digital asset firms face a rapidly maturing regulatory landscape. EU MiCA, UK FCA crypto regimes, evolving SEC approaches, MAS in Singapore, HKMA and SFC in Hong Kong, VARA in Dubai, and other jurisdictions are building out frameworks that increasingly resemble traditional financial services regulation.

Operational priorities for compliance teams at these firms:

  • Authorization and ongoing supervision with a national competent authority

  • Market abuse controls for crypto-asset trading

  • Employee compliance including personal crypto trading, gifts, OBAs, attestations

  • Transaction monitoring and sanctions screening under AML and Transfer of Funds obligations

  • Third-party risk for exchanges, custodians, banking partners, infrastructure providers

  • Recordkeeping and evidence at the standard competent authorities expect

  • Regulatory change management across a fast-evolving rule set

Why MCO fits crypto firms

MCO is built for regulated financial services firms. Crypto and digital asset firms use the same platform, with crypto-specific capabilities built in.

Dedicated Crypto Trading Compliance module (KYE®)

MCO's Know Your Employee suite includes Crypto Trading Compliance as a dedicated module for employee personal crypto dealing, alongside the full KYE suite (Personal Trading Compliance, Gifts, Entertainment and Hospitality, Political Contributions and Donations, Outside Business Activities, Registrations and Licensing, Connected Persons and Relationships, eComms Archive, eComms Review).

Third-party risk (KYTP®)

Third Party Lifecycle Manager, Third Party Screening (money laundering, terrorist financing, fraud, corruption), and Third Party Risk Assessment support the CASP ecosystem of exchanges, custodians, banking partners, and infrastructure providers.

Market abuse controls (KYT®)

Deal Review Manager, Insider & MNPI Management, Trade Surveillance, Transaction Monitoring, and Transaction Screening support the MAR-equivalent regime MiCA introduces for crypto-asset markets (source).

Regulatory change and policy governance (KYO®)

Compliance Obligations Manager, Compliance Assurance Manager, Policy Content Governor, and Compliance Risk Manager support tracking MiCA and adjacent regulatory change.

Evidence for competent authorities

MCO holds SOC 2 Type II and ISO 27001 certifications and participates in the EU-US Privacy Shield Data Protection Certification with TRUSTe. Data is encrypted in transit and at rest (source).

Published customer proof

A leading European international crypto service provider focused on institutional crypto trading chose MCO's Know Your Third-Party (KYTP®) solution to address MiCA compliance challenges. The firm previously struggled with "manual compliance procedures" and systems that "lacked a defensible audit trail and did not leverage advanced technologies like machine learning to filter out false positives and redundant alerts." With MCO KYTP, the firm achieved:

  • Third-party risk assessment and classification

  • KYC onboarding

  • Ongoing due diligence and screening

  • Real-time transaction monitoring

  • Reduced operational complexity through automation

  • Robust compliance with a defensible audit trail

(source)

Common regulatory frameworks covered

  • EU MiCA for CASPs, ART issuers, EMT issuers

  • EU Transfer of Funds Regulation (TFR) and AML Directives

  • UK FCA crypto-asset registration and financial promotions rules

  • SEC and FINRA where digital asset activity falls under securities regulation

  • MAS Payment Services Act and Digital Token Service Provider framework (Singapore)

  • HKMA and SFC virtual asset regulatory regimes (Hong Kong)

  • VARA regulatory framework (Dubai)

  • FATF Travel Rule obligations

When MCO is the right choice for crypto firms

  • The firm is a CASP, ART/EMT issuer, exchange, custodian, or regulated digital asset business

  • Compliance infrastructure has to be built or upgraded to meet MiCA or equivalent authorization requirements

  • Market abuse controls, employee compliance, third-party risk, and regulatory obligations need to sit on connected infrastructure

  • Competent authority reviews require financial-services-grade evidence

  • The firm expects the compliance program to expand as regulatory frameworks evolve

Further reading