When traditional finance adopts crypto: Updating risk assessments and controls

Meredith Fitzpatrick, Thomas Hyun, Sharon Hall and Arianna Radu
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Meredith Fitzpatrick: Director of Cryptocurrency, Investigations and Compliance, Forensic Risk Alliance, USA
Thomas Hyun: Director of Cryptocurrency Compliance, Forensic Risk Alliance, USA
Sharon Hall: Director, Forensic Risk Alliance, UK
Arianna Radu: Senior Associate, Forensic Risk Alliance, UAE

Journal of Financial Compliance, 2025, vol. 9, issue 2, 126-135

Abstract: As regulatory clarity around digital assets improves and enforcement eases ߞ especially in the USA ߞ traditional financial institutions may find the time right to enter the crypto market. However, To maintain their positions as trusted institutions, the most successful institutions will be updating legacy risk frameworks to capture the distinctive risks and challenges inherent to cryptocurrency products and services. This paper examines how financial institutions can adapt their risk and compliance functions to leverage opportunities in the crypto space while mitigating threats to their overall regulatory obligations and financial crime exposure. Beginning with a brief overview of recent regulatory developments that are encouraging greater institutional participation, the paper then outlines how crypto introduces new and evolving risks that require specialist attention. The paper concludes with practical guidance on embedding crypto into enterprise-wide risk assessments (EWRAs). Institutions that wish to innovate responsibly must ensure these controls are designed to meet regulatory expectations while maintaining trust with clients and stakeholders. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.

Keywords: cryptocurrency; blockchain; regulatory compliance; financial institutions; risk assessments (search for similar items in EconPapers)
JEL-codes: E5 G2 K2 (search for similar items in EconPapers)
Date: 2025
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