People
This article first appeared in an issue of GRIP magazine.
Trust is the real currency in all financial markets. While crypto markets move faster than their traditional equivalents, the need for the sound underpinnings of transparency and integrity remains just as strong.
In the rapidly evolving digital asset landscape, focusing primarily on regulatory headlines misses the deeper story. While new frameworks in the U.K., E.U., and beyond are shaping the market, real progress – and long-term success – hinges on understanding the critical relationship between innovation, trust, and compliance. As crypto moves toward mainstream adoption, grasping how these elements interact is essential for firms that want to get ahead.
Trust is the backbone of all financial systems, yet in crypto, its role becomes even more pivotal. Unlike traditional finance (TradFi), built on centuries of institutional reputation and established safeguards, crypto is a newer ecosystem with a much shorter historical track record, making trust harder to earn and easier to lose. Users have seen rapid innovation in the industry’s short history, but also numerous scams and cybersecurity breaches. Switching between platforms is easy and, when trust breaks down, consumers can rapidly withdraw from their crypto-asset service provider, or even revert to traditional finance, amplifying the cost of failure for firms.
Transparency and protection underpin trust in crypto. Whether users interact with open blockchain protocols, regulated crypto exchanges, or platforms that combine both, they expect clarity about how their funds are protected, how technology operates, and how risks are assessed. Without the historic institutional layers that have traditionally underpinned financial markets, crypto businesses must instil market confidence by demonstrating operational integrity at every turn.
“Where trust is lacking, markets react instantly.”
Trust is also shaped by regulatory clarity and business conduct. Studies show that interpersonal and regulatory trust are decisive for consumer adoption and investor confidence in crypto assets. Where trust is lacking, markets react instantly. This reality pressures providers to embed robust compliance and transparency into their operations.
TradFi evolved through cycles of crisis, scandal, and reform, developing detailed regulatory frameworks in response to broken trust. Crypto moves faster than TradFi ever did, but it cannot ignore the lessons learned: protecting client assets, managing conflicts, ensuring transparency, and the value of a culture that prioritises risk. Failures in crypto, such as lost client funds or unresolved conflicts of interest, often echo issues seen in TradFi, but play out in weeks instead of years.
Many crypto businesses, recognising the opportunity to benefit from the skills built up in TradFi, have hired compliance talent directly from banks and investment firms. However, integrating a genuine compliance culture remains uneven. Some firms treat compliance as strategic, led from the top and embedded in every decision. Others still see it simply as a necessary cost, implemented mainly to secure a licence or satisfy minimum regulatory demands.
The most successful firms will borrow the right lessons from TradFi, focusing on building forward-looking, proactive risk management and compliance cultures, not merely ticking boxes. Senior management will set the tone, establish accountability, and foster collaboration across functions. Agile, well-integrated risk and compliance frameworks will minimise crises and enable smoother expansion of businesses.
“Leaders in crypto increasingly view compliance as an enabler.”
Competition in crypto is heating up as more users and institutions engage. Regulatory requirements, when seen as fixed obstacles, can slow innovation. However, firms that embed compliance into strategy and daily operations will discover the opposite: fewer regulatory hurdles, faster product launches, and greater trust – allowing bold growth in a complex market.
Leaders in crypto increasingly view compliance as an enabler. Technology-enabled risk tools help firms meet rising expectations from users and regulators, all while retaining speed. Compliance is more than mitigating risk or satisfying authorities; it is instrumental in earning stakeholder confidence, building long-term trust, and differentiating a business.
Crypto’s journey to the mainstream is gaining momentum, and the competition is intensifying. The winners will be those who link innovation with real trust, learned from the hard-won lessons of TradFi and delivered by an embedded culture of risk management and compliance. For crypto firms, strong compliance goes beyond surviving regulatory change. It is about thriving as trusted leaders in markets that prize transparency, resilience, and adaptability.
As crypto writes its next chapter, trust and compliance will drive, not hinder, bolder innovation and sustainable growth.
