Crypto Institutionalizes and Matures
Preparing Compliance Teams for Emerging Challenges
2024 has been a year of maturation for cryptocurrency. 2021 was the boom, 2022 was the bust, 2023 was the recovery, and 2024 is now the mainstreaming. Bitcoin is hitting all-time highs, but that’s not daily news – because it is just more and more expected. On the regulatory front, the European Union’s Markets in Crypto-Assets (MiCA) regulation, coming into effect on December 30, 2024, is the best indicator of crypto’s staying power. Yet even here, in the US, market activity reflects the same with Stripe’s acquisition of Bridge and, of course, Star’s acquisition of my company, Aer. For a long time in crypto, the comment was that “tradfi is coming.” It turns out they’re already here.
The Impact of Spot ETFs on the Crypto Market
2024 started with the launch of the Bitcoin ETFs, approved by the SEC in January. There can be no better sign that institutions are here than BlackRock, Fidelity, Franklin Templeton, and similar firms offering these ETFs. While the SEC approval was begrudging, the subsequent approval of Ethereum ETFs made clear that this is a one-way train. It also unlocked access to crypto for a host of investors, and their advisors, who previous to this wouldn’t have touched the asset class. The impact on prices has been predictable and significant.
The Role of Compliance in the New Crypto Era
These ETFs reflect a broader trend as individuals enter the crypto market. They may start with the ETFs but quickly go for spot BTC and ETH, then smaller coins. This is especially pronounced among younger investors. All of this raises the potential for conflicts of interest and regulatory scrutiny within financial institutions. Compliance teams must now monitor employees’ trading activities even more closely, as the risk of regulatory violations grows in parallel with crypto adoption. Implementing strong compliance mechanisms is critical to navigating this complex environment while upholding organizational integrity.
The Future of Crypto
As the crypto market evolves, the introduction of ETFs for additional cryptocurrencies, such as Ripple (XRP) and Solana (SOL), is likely next on the horizon. This expansion would further diversify the crypto investment landscape, introducing new investors to the digital assets market. Compliance teams should anticipate increased regulatory complexity as more assets enter the ETF space, and personal crypto trading increases, requiring proactive risk management strategies.
StarCompliance Joins Forces with Aer Compliance
As the crypto market continues to expand and integrate with traditional financial systems, the need for effective compliance solutions has never been greater. In this rapidly changing landscape, StarCompliance’s (Star) acquisition of Argus Inc., DBA Aer Compliance (Aer), positions Star as a leader in providing a comprehensive compliance solution for cryptocurrency trading. Through this acquisition, Star and Aer combine their strengths to deliver a complete suite of tools designed to address the unique compliance challenges of the crypto era.
Key highlights of this acquisition include:
- Full-Scale Compliance Solution: Star and Aer bring together their expertise to offer a comprehensive platform tailored for employee compliance around cryptocurrency trading.
- Real-Time Risk Management: The combined solution provides specialized analytics and management tools that allow compliance teams to monitor and mitigate risks associated with employee crypto trading as they occur.
- Enhanced Regulatory Compliance: Designed to meet emerging regulatory requirements, the Star and Aer platform helps organizations uphold standards while managing crypto-related risks.
- Conflict of Interest Mitigation: With features that closely monitor employee trading, the solution minimizes potential conflicts of interest and aligns with industry best practices.
As regulatory frameworks like MiCA emerge, Star and Aer’s integrated platform ensures that organizations are well-prepared to meet compliance requirements confidently and effectively in the evolving cryptocurrency landscape. To learn more about Star and its crypto trading solutions click [HERE].
In addition, Star has launched its 4th Annual Crypto & Compliance Survey, gathering insights from industry leaders on how they’re preparing for evolving crypto regulations. Input will help shape the future of compliance and provide valuable benchmarks for the industry.
TAKE THE SURVEY
Cryptocurrency and Compliance Survey
Star has launched its 4th Annual Cryptocurrency & Compliance Survey, gathering insights from industry leaders on how they’re preparing for evolving cryptocurrency regulations. Input will help shape the future of compliance and provide valuable benchmarks for the industry.
