Compliance First: The Cultural Change Crypto Needs

Crypto must go through a cultural change to reestablish trust and credibility. This is essential for digital assets to fulfill their purpose of creating a more transparent, fair, and inclusive tokenized economy for everyone. 

Government regulation is a crucial component, but it must be complemented by the conscientious compliance of crypto firms, services, and communities. The only alternative to responsible compliance is short-sighted profit-seeking that rewards misbehavior and hinders mass adoption. Crypto should strive to surpass the safeguards of traditional financial institutions, not disregard them. 

We cannot simply wait for lawmakers to establish regulations. In addition to the lack of trust and decentralization of blockchain technology, we need to proactively embrace the best standards from other industries. 

Therefore best practices need to be implemented. Compliance must be first.  

Legal and compliance departments should conduct rigorous due diligence processes. Clients and partners should undergo Know-Your-Customer, Know-Your-Business, Know-Your-Transaction, Anti Money Laundering, and Countering the Financing of Terrorism screenings one by one. Crypto company employees should be mandated to file their potential conflicts of interest disclosures quarterly — just as it is mandatory at TradFi institutions. To prevent the risk of insider trading and commingling assets, there should be a “Chinese wall”, strict separations of different departments within crypto organizations. Legal protections for partners and clients need to be coupled with prudent risk management strategies and robust IT security. 

Being registered as a Digital Asset Service Provider with the French Financial Markets Authority, the AMF, this is exactly why Flowdesk implements institutional-grade policies. To help crypto issuers focus on their innovative missions, we are further increasing our compliance standards in the US, EU, and Singapore. 

We believe that compliance should be regarded as an insurance policy. Its purpose is to ensure that digital asset projects can build sustainable markets on the blockchain. But it is more than a service guarantee or customer protection. Compliant services contribute to reducing users’ legal-administrative burdens, too. 

Flowdesk’s all-in-one platform is designed with this intention: to make it easier for digital asset issuers to build sustainable markets. It is scalable and future-ready: always up to the latest regulatory, financial, and technical developments. It comprises all the necessary tools and intelligence in one place for crypto issuers to be in full control: Market Making as a Service, custody, OTC trading and brokerage, as well as treasury management services. This is how Flowdesk supports token projects so that they can focus on what they do best: building a tokenized future. 

Only responsible, compliance-first solutions can spur web3 innovation and fulfill this vision. It is only through strict due diligence and meticulous compliance that tokenization can give way to new types of goods, services, and business models. 

Flowdesk is working to ensure it can reach its true potential and real utility: delivering a more accessible, fairer, and transparent tokenized economy for all. This is crypto’s true mission, and it hinges on the cultural change that puts compliance first. 

This post is commissioned by Flowdesk and does not serve as a testimonial or endorsement by The Block. This post is for informational purposes only and should not be relied upon as a basis for investment, tax, legal or other advice. You should conduct your own research and consult independent counsel and advisors on the matters discussed within this post. Past performance of any asset is not indicative of future results.

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