AML CTF & small crypto exchanges — understanding the risk

asked by u/chrislee · 6d · 1 answers

I'm trying to get my head around how smaller, regional crypto exchanges manage their AML/CTF obligations, especially given the costs involved. It seems like the regulatory burden for a small-to-medium sized exchange could be disproportionate to their transaction volume, potentially pushing them to cut corners or innovate in less than ideal ways. What are the common pitfalls you've seen with smaller players in this space trying to comply with evolving global standards like FATF travel rule, etc. without the deep pockets of a Coinbase or Binance? Is there a point where the cost of compliance makes operating legitimately almost impossible for them?

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  • u/rtoth· 1 pts· 6d

    That's a really interesting point. It makes you wonder if some smaller exchanges might struggle to invest in the robust compliance tech and personnel larger institutions can afford, potentially creating vulnerabilities or operational inefficiencies. Have you seen any examples of smaller exchanges successfully navigating these challenges?

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