AI in crypto compliance: Looking for a balanced approach

AI has already become one of the most talked-about topics in crypto, with top industry-specific and financial events, as well as leading analytics companies discussing its impact and potential in compliance, fraud detection, and operational efficiency. As regulators increase scrutiny and illicit actors grow more sophisticated and fast, digital assets businesses are considering integrating AI

Can AI really help streamline compliance, detect hidden threats, and secure businesses? The reality is more nuanced than simply “plug and play.” AI can’t replace human oversight or responsibility, but it’s a tool that, when implemented thoughtfully, can help maintain the best industry standards. Let’s explore its possibilities.

Finding hidden risks that traditional methods miss

Traditional methods are good at catching known patterns, but they are not as effective at picking up on new or unexpected tactics. AI stands out here, analyzing large volumes of data and flagging anomalies that might fly under the radar of simpler models

The main advantage of using it in transaction monitoring and detecting illicit activity is in identifying ‘unknown unknowns,’ which traditional scenario-based methods are unable to detect. Additionally, advanced AI tools can adapt to new criminal techniques, letting compliance teams remain proactive rather than reactive.

Meanwhile, verifying data quality and addressing bias are significant for reliable outcomes. AI-based systems still produce false positives, but usually their numbers are lower compared to scenario-based systems. The case study published by Deloitte and United Overseas Bank showed a 5% increase in true positives and a 40% decrease in false positives in transaction monitoring, as well as a 40% rise in operational efficiency

Saving time, costs, and workforce

The practical benefits of AI are beyond catching hidden threats. As the complexity of regulatory demands rises, many companies face rising costs in both time and workforce. AI-based solutions can help by automating tasks that would otherwise be manual and require more time, for example:

• Prioritizing alerts and flagging high-risk cases.
• Large language models can handle initial writing or policy reviews, freeing compliance officers to focus on critical analysis.

AI allows teams to concentrate on strategic decisions by relieving them of repetitive chores. Smaller crypto firms, in particular, can benefit from this. Free from bulky legacy systems, they can be faster and more flexible in adopting cutting-edge tools to remain competitive against larger players

Still, staff training is key to helping teams interpret automated findings correctly and make data-based decisions.

Enhancing efficiency, but not regulatory collaboration

Although AI can significantly boost day-to-day efficiency, it is less likely to transform how crypto companies and regulators collaborate. Compliance officers still need to talk directly with regulatory bodies to address policy gray areas, manage ethical dilemmas, and ensure trust

AI’s job is to streamline internal workflows, not to replace human judgment in those high-level discussions. Ultimately, regulators want clear, accountable communication, something only people can provide

Using AI for competitive advantage and reputation

Players in traditional finance are already focusing on AI for compliance, and crypto companies that overlook this approach risk falling behind. While merely adopting AI won’t affect a crypto firm’s reputation directly, failing to use it where it’s clearly beneficial can backfire. If a preventable fraud incident or compliance breach occurs, the reputational damage could be severe. So, we can see implementing AI as a competitive advantage

Moreover, responsibly implemented AI can enhance marketing efforts. Firms are already highlighting their AI-driven tools as evidence of risk management and user protection. When done transparently and ethically, these measures can strengthen consumer confidence and a company’s standing in the industry.

Keeping humans in the driver’s seat

Even as AI can take on a share of compliance tasks, responsibility can’t be delegated to algorithms. Decisions with legal or ethical consequences require a distinctly human touch. AI can flag a suspicious transaction, but the final call on how to handle that alert—whether to freeze an account or close it, for example—should remain with a qualified professional. Retaining control also protects companies from overreliance on technology that, while impressive, can never truly match human intuition and responsibility.

AI is on track to become an important part of crypto compliance. By combining its data-processing capabilities with human insight and ethical judgment, companies can spot threats more effectively, lower costs, and save time. The key is to find the right balance between automation and accountability

The crypto industry should be encouraged to explore what AI has to offer while recognizing that technology alone doesn’t build trust. Real trust calls for a true commitment to compliance, transparent communication with regulators, and a focus on customer protection. By treating AI as a helpful tool, not a replacement for human judgment, the industry can move toward a safer future.

Yulia Murat

Yulia Murat is the head of regulatory affairs at Global Ledger, bringing extensive experience in financial crime compliance and anti-money laundering. She has previously worked with the UK’s Financial Conduct Authority, where she assessed applications from crypto firms seeking UK registration. Yulia has also held significant roles in the financial sector, including serving as Regional Head of Correspondent Banking Financial Crime Compliance at Standard Chartered Bank and leading the Financial Crime Compliance Enhanced Due Diligence team at Standard Bank Group’s London office. Her diverse background encompasses positions such as Head of AML at WorldFirst and Senior Policy Advisor at The Wolfsberg Group. Yulia’s comprehensive expertise underscores her commitment to enhancing regulatory frameworks and promoting compliance within the financial industry.