For those that aren’t certified money laundering specialists, ACAMS is the Association of Certified Anti-Money Laundering Specialists—the premier organization for training and certifying bank AML teams. I've just returned from ACAMS Hollywood, a three-day convention of specialists, technology firms, and consultants serving this function. What struck me most was the dramatically increased focus on cryptocurrency compared to previous years.

The convention spotlighted cryptocurrency from the opening keynote, with discussions following two primary themes:

1. Cryptocurrency's expanding role in financial crime
2. Managing risks of crypto in a new regulatory environment

High-Stakes Fight Against Crypto Crime

Tigran Gambrayan delivered the opening address, perfectly illustrating both crypto's growing role in financial crimes and the personal risks involved in combating it. Early in his career, Gambrayan used the misconception that cryptocurrencies are anonymous to help dismantle major darknet marketplaces. However, he gained greater notoriety after being imprisoned by the Nigerian government for six months in 2023 following a joint operation that exposed a massive cryptocurrency fraud ring allegedly connected to high-ranking officials. While Nigerian authorities claimed sovereignty violations, international observers condemned his detention as politically motivated retaliation. Gambrayan's harrowing ordeal underscores the personal risks faced by AML investigators, where exposing financial crimes can lead to criminals doxxing personal information, compromising financial accounts through identity theft, and filing fraudulent claims against property. Multiple banking executives reported shifting greater resources and technology investments toward investigating and tracking crypto-based transactions. During panel discussions, these leaders detailed how their institutions are enhancing blockchain analytics capabilities, hiring specialized crypto investigators, and implementing monitoring systems specifically designed to handle digital assets. These investments are driven by two converging factors: the sophisticated evolution of criminal tactics in the crypto sphere and the changing regulatory policies that now encourage greater bank participation in digital asset markets. As one compliance officer put it, "We're being asked to build new defenses against criminals’ use of crypto, while also figuring out how to manage the risks of our first line expanding into digital assets".

Regulatory Landscape Transformation

Discussions also addressed the loosening regulatory approach to crypto under the new presidential administration. A notable pivot has occurred from pressuring financial institutions to "debank" crypto companies to actively encouraging banks to engage with crypto participants and offer digital asset products. Each ACAMS conference has a regulatory AMA (ask-me-anything) session where regulators from the FDIC, OCC and the Fed answer questions from a moderator and the audience. It is one of the more well attended sessions. This year the discussion focused exclusively on how regulation of banks is changing from the previous administration to this one. The biggest topic of discussion in the regulatory AMA was how all three regulatory bodies now have a more permissive approach for banks to engage in crypto-related activities. Some of the actions named were:

• In March, the FDIC rescinded guidance requiring FDIC-supervised institutions to give notice before engaging in crypto-related activities.
• The Fed Board also withdrew from two key pieces of crypto-asset guidance: a 2022 supervisory letter that required advance notice of crypto-asset activity and a 2023 supervisory letter that required all banking organizations to notify the Board of any crypto-asset activities.
• The FDIC, Fed and OCC all withdrew from two joint statements from early 2023 on crypto-asset risks and liquidity risks.
• The FDIC acting chairman stated that the FDIC would adopt a more open minded approach to innovation particularly with regard to blockchain and digital assets.

For the assembled risk and compliance professionals, these changes present significant new challenges. Post-AMA sessions featured bank executives discussing how they are:

• Adapting risk policies to facilitate bank activity in digital assets
• Demonstrating proactive risk management to regulators
• Navigating regulatory divergence between EU and US jurisdictions
• Upgrading technology to combat AI and crypto-enabled financial crime
• Enhancing cross-functional collaboration to better detect malfeasance.

Looking Ahead

The conference made it abundantly clear that cryptocurrency has moved from the periphery to the center of anti-money laundering concerns. Financial institutions now face the challenging balancing act of expanding their crypto business while simultaneously strengthening their defenses against financial crime. This tension between opportunity and risk will likely define the AML landscape for years to come. For compliance professionals, success will require continuous education, adapting the organization of fraud and AML processes adaptation, and the adoption of new technology. The crypto revolution in banking is here—whether AML teams are fully prepared or not.

To help with this, Celent has an upcoming solutionscape looking at Crypto Investigative Tools for AML.