James Smith, co-founder of Elliptic, noted a significant change in the crypto compliance landscape, influenced heavily by regulatory pressures over recent years. Traditionally, only a handful of companies prioritized compliance, with Coinbase being an early adopter. As traditional institutions like Fidelity and DBS Bank entered the crypto space, the expectation for compliance grew. Smith highlighted that the involvement of regulators, especially from New York State, has forced exchanges globally to prioritize compliance to integrate into the wider financial ecosystem. Compliance efforts now focus on exchanges and peer-to-peer protocols, seen as key areas for Anti-Money Laundering initiatives. Smith pointed out that even after identifying stolen funds, users continued trading through decentralized platforms, raising concerns about liquidity and the need for better checks on fund sources. He emphasized that the industry needs to tighten regulatory standards to prevent misuse by hackers and illicit actors.

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