The Key Skills for Crypto Compliance Officers in 2024

    What are the key skills a compliance professional needs in the crypto industry?

    Compliance professionals are crucial to any finance business, but especially so for Crypto-Asset businesses as this is still a developing industry, with rapid growth, ongoing technological advancements and an evolving and maturing regulatory environment. 

    Crypto-Asset companies need strong compliance teams in place to ensure they are adhering to regulations, to help gain registrations and regulatory approvals, and to mitigate risks that maybe exposed to. It's also important in relation to the perception of the company from a stakeholder, investor and customer point of view, all of whom will feel more confident if there are proven robust compliance procedures and frameworks in place.

     

    What are the key skills Compliance Officers need?

     

    If you're a compliance professional working in a Crypto-Asset business, or you are interviewing for a role in the industry, then it's important to understand which key skills to focus on in order to thrive.

     

    Here are our top 5 skills for compliance officers in the crypto industry:

     

    1. Crypto-Asset Legislation and Regulation
    2. Compliance Framework  require mitigating the risk which Crypto-Assets are exposed to
    3. Risk Management
    4. Blockchain and DLT Knowledge
    5. Communication and Collaboration

     

    Cryptocurrency Legislation and Regulation

     

    It's important to have asolid understanding of the legal frameworks governing Crypto-Assets, including the different regimes depending on the jurisdiction. Crypto Compliance Professionals should keep up to date with rapid changes in regulations across different jurisdictions. 

     

    To ensure you're up to date, keep in touch with industry news, updates from regulators, and attend industry events or webinars. There are also podcasts and other medium which can help you stay abreast of any changes; as well as talking regularly to your peers in the industry.

     

    Look at international news too, as any changes abroad are likely to affect your business at some point.

     

    Compliance Framework for Crypto-Assets

     

    Proficiency in designing and implementing compliance programs specific to digital assets is very important. Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures are critical components, as these helps identify and stop financial crime.

     

    Crypto-Asset businesses looking for investors and customers will want to have strong frameworks like this in place so that they can demonstrate the safety of the platform and product and showcase their strong compliance team.

     

    Risk Management

     

    As with any financial product, there will be risks - and Compliance professionals in a Crypto-Asset business should concentrate on mitigating these and safeguarding the business.

     

    The ability to assess and manage risks associated with crypto transactions, market volatility, and regulatory changes is vital. Crypto Compliance Professionals must identify potential risks, develop mitigation strategies, and adapt swiftly to dynamic market conditions.

     

    Blockchain and DLT Knowledge

     

    It's important for Compliance professionals to understand the differences in blockchain technology versus traditional banking and payments. Understanding the underlying technology is crucial for identifying risks and ensuring compliance within blockchain networks. 

     

    Proficiency in blockchain concepts, consensus mechanisms, and smart contracts allows compliance professionals to address unique challenges in the crypto ecosystem, which would not be found elsewhere.

     

    Communication and Collaboration

     

    It is always important for Compliance professionals in any business to be effective communicators, and in Crypto this is no exception. Effective communication with stakeholders is essential. 

     

    Crypto Compliance Professionals should be capable of interacting with Regulators and Lawmakers, Law Enforcement Agencies, as well as various internal stakeholders such as those working on the technology behind the products on offer.

     

    Crypto rules and regulations are often changing, so compliance professionals in such businesses will often be required to work and collaborate with regulators to satisfy them that the business is meeting requirements.

     

    In conclusion

     

    We know that compliance professionals are essential for all financial services businesses, including crypto; your skills in this field are both desirable and difficult to find, so you will want to showcase these when speaking to businesses about your potential to join them.

     

    In crypto businesses, if you have the skills we've outlined above, you'll be in the best position to impress and excel in the position; and to carry out the role effectively so that the business achieves its ambitions.

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    This blog was written in collaboration with Theodore Morita, Partner at BitCompli. 

    Theodore is a Japanese-French-English trilingual MLRO and Chief Compliance Officer with 15 years+ experience in Financial Services. Having worked for numerous Global Banks in AML, FinCrime and Sanctions, he has held multiple MLRO and Chief Compliance positions for Payments and E-Money Firms in the last 9 years.

    He has also successfully obtained Licence Application in the UK and in the EU. He's been advising Firms on various Regulatory or AML matters. Lately he joined forces with BitCompli as a Partner, where he leads the French practice.