As the digital asset industry matures, the stakes around governance, risk, and ethical conduct have never been higher. From insider trading cases to structural conflicts in vertically integrated platforms, regulators are sharpening their scrutiny, and institutions are demanding more from crypto-native firms.

In this on-demand session, four experts with deep roots in traditional finance, regulatory enforcement, and digital asset compliance unpack what conflicts of interest look like in today’s crypto markets, how regulators are reacting, and what forward-thinking firms can do to stay ahead.

Get practical strategies on managing COI in decentralized ecosystems, building trust through TradFi-grade controls, and future-proofing your compliance posture as the regulatory landscape evolves.

Glossary of Terms

Conflict of Interest (COI): A situation where a party’s responsibility to act impartially is compromised by a competing personal or institutional interest. In digital assets, this can manifest between firms and clients, employees and clients, or internally within firms.

Digital Assets: Assets that exist digitally and rely on blockchain technology. Examples include cryptocurrencies, tokens, and digital securities.

Trade Surveillance: Tools and processes used to detect suspicious or manipulative trading behaviors such as front-running, insider trading, or spoofing.

MNPI (Material Non-Public Information): Confidential information that could influence an investor’s decision and impact market prices if made public. Handling of MNPI is a major compliance concern.

TradFi (Traditional Finance): A shorthand term for legacy financial systems and institutions, such as banks, broker-dealers, and asset managers.

OCC (Office of the Comptroller of the Currency): A U.S. regulator that charters, regulates, and supervises national banks and federal savings associations, including Anchorage Digital Bank.

KYT (Know Your Transaction): A compliance process for monitoring and analyzing transaction behavior to detect money laundering or other illicit activity.

Integrated Business Model: A structure where a single company provides multiple traditionally separate financial services (e.g., trading, custody, and clearing), potentially creating inherent conflicts of interest.

Universal Client Risk View: A holistic, real-time risk profile of a client that integrates data across KYC, transactions, behavior patterns, and alerts.

Regulatory Arbitrage:The practice of taking advantage of differences in regulation between jurisdictions, often by locating operations in more lenient regulatory environments.

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Frequently Asked Questions

Why are conflicts of interest more complex in digital assets than in traditional finance?

Because digital asset firms often combine functions like trading, custody, and clearing under one roof, unlike in TRADFI where these are legally separated. This setup introduces risks that require robust control frameworks to manage.

What’s the SEC’s current stance on crypto firms offering multiple services?

The SEC has challenged these integrated models but many cases remain unresolved. Until clear guidance is issued, firms are encouraged to follow TRADFI best practices to mitigate risks.

How can firms practically mitigate conflicts of interest?

By implementing clear organizational and operational controls, such as segregated legal entities, robust MNPI handling policies, trade surveillance tools, and ethical conduct training.

What role does technology play in reducing conflicts and risk?

A significant one. Tech solutions can improve trade surveillance, automate alerts, consolidate risk data, and reduce manual errors—though human oversight is still essential.

Should crypto startups build compliance programs from day one?

Yes. Building compliance into the design stage of services helps mitigate risk, reduce exposure, and demonstrate credibility to regulators and institutional clients.

What is “pay-to-play” risk in this context?

This refers to the risk of firms giving improper gifts or incentives to government officials or institutional players, which can be viewed as a conflict or even corruption. It’s increasingly relevant as more public entities invest in crypto.

Why was Anchorage Digital held up as a positive example?

Because it has structured its business to meet the same rigorous standards as federally regulated banks and separates business functions under different legal entities, showing best-in-class compliance maturity.