How financial institutions can work with crypto without breaking the law. A simple guide

Blockchain analysis gives banks and financial institutions visibility into risks tied to cryptocurrencies and digital assets. However, simply having access to the data is not enough to make consistent, well-informed decisions. For the system to truly work, it must be properly configured to match the organization’s specific risk appetite, employees must be trained, and crypto workflows need to be integrated into existing financial control processes.

Today, many financial institutions understand that digital asset risks can no longer be ignored. Yet for most companies, a fully mature infrastructure for managing these risks is still in the early stages of development.

Once an organization begins assessing its readiness to handle cryptocurrencies, the next question arises: how do you move from basic awareness to a complete, effective risk control and management system? GetBlock AML Research has published a detailed guide on how financial institutions should approach working with crypto.

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Employee training becomes a critical task

Working with blockchain is fundamentally different from traditional banking transaction analysis. In conventional finance, transaction data is fragmented across banks and often inaccessible to outsiders. On the blockchain, everything is public — transactions can be tracked, linked, and analyzed across their full history.

This requires financial professionals to learn entirely new approaches.

Compliance officers and investigators responsible for reviewing suspicious activity must understand how crypto transfers work, recognize common fraud patterns, and trace funds across wallets and different blockchains. Their daily work revolves around analyzing risk signals and investigating suspicious transactions — a noticeable shift from traditional AML procedures used in conventional banking.

Compliance leaders and risk managers face a different challenge: they need to know how blockchain analysis systems are configured, how risk scores are determined, and whether those settings align with the company’s internal policies. Each organization must define for itself what counts as suspicious activity, which clients require enhanced due diligence, and when escalation is necessary.

Leadership must also ensure consistent application of rules so that similar cases don’t result in contradictory decisions.

Internal audit plays a separate but vital role. Auditors don’t need to be crypto investigators, but they must understand the system well enough to evaluate whether controls are working effectively and whether the company can defend its decisions during a regulatory review.

Training cannot be a one-time effort. The crypto industry evolves rapidly — new blockchains, evasion techniques, fraud schemes, and regulatory requirements appear constantly. Financial institutions must regularly update their teams’ knowledge and adapt processes accordingly.

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Why proper system configuration is so important

Blockchain analysis tools cannot simply be installed and used without careful setup. Every financial organization has its own risk profile, so configurations must be tailored to the specific business.

Screening rules will differ depending on the company’s jurisdiction, client base, and product offerings. Some firms are more concerned about fraud, others about sanctions evasion or money laundering.

The goal is to build balanced controls. When configured correctly, the system delivers meaningful alerts, allowing teams to respond quickly to genuine threats. If set too strictly, analysts drown in noise — wasting time on false positives while real risks get buried.

System effectiveness also depends heavily on data quality: how accurately risks are identified, how many cryptocurrencies and networks are covered, and how quickly new threat intelligence is incorporated.

Configuration is never “set and forget.” As the company launches new products, enters new markets, or faces updated regulations, control parameters must be continuously adjusted.

Even good technology is useless without clear processes

Even with high-quality data and advanced tools, the system can still fail if the organization lacks well-defined processes.

Crypto risk information must be embedded into existing customer due diligence and suspicious activity investigation workflows. Without this integration, employees will improvise, leading to inconsistent decisions, poor documentation, and problems during regulatory audits.

Financial institutions need to clearly define who reviews suspicious crypto wallets first, what information is required for decision-making, when cases escalate to management, and how findings are documented.

Responsibilities are typically divided across multiple lines of defense: first-line analysts handle initial reviews, compliance teams set policy and ensure regulatory alignment, and auditors evaluate overall effectiveness.

When processes are properly designed, the organization can clearly explain why a decision was made, what data supported it, and how actions complied with internal policies.

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Should crypto be kept separate from traditional finance?

Many institutions face another key question: should crypto operations be monitored separately from traditional banking activity, or integrated into a single unified control system?

In the early stages, a dedicated team and separate tools can be more practical. It allows the company to test processes, train staff, and avoid overloading core infrastructure — especially when crypto volumes are still low.

However, this approach has growing limitations over time.

The line between traditional finance and crypto is blurring. The same client may use bank accounts, hold digital assets, and move funds across both systems. When information is siloed, important connections between activities can be missed.

More mature organizations are gradually moving toward unified control systems, where crypto wallet data is analyzed alongside traditional banking transactions, and investigations consider both on-chain and off-chain information.

There is no one-size-fits-all solution. Each organization must consider its size, crypto exposure, and control maturity. But the core principle remains: crypto risk management must be systematic, consistent, and fully integrated into the company’s day-to-day operations.