LexisNexis executive says compliance orchestration is rising in crypto

Crypto companies are under growing pressure to coordinate compliance across jurisdictions, products and data sources, according to Chris Foye, senior director for market planning at LexisNexis Risk Solutions. Foye said the commercial effect is direct: firms must satisfy regulators while preserving fast onboarding and transaction flows in a market where customers can switch providers quickly.

Foye set out the argument after a discussion with Azrie Affendie, financial crime programme manager at Blockchain.com, on the Regtech Pulse podcast. He said the compliance burden for global crypto businesses differs from that faced by many traditional banks because rules, supervisory expectations and risk priorities vary by market.

According to Foye, crypto firms cannot rely on a single customer onboarding or monitoring model across all countries and services. Risk assessments need to account for local threats, including sanctions exposure, organised crime, terrorist financing and other regional financial crime patterns. He said supervisors increasingly expect firms to show why their controls are suitable for the relevant market, rather than only proving that controls exist.

Blockchain data changes the compliance task

Foye said crypto compliance combines conventional controls such as know-your-customer checks, sanctions screening and payment screening with blockchain-specific analysis. Firms must review public ledger activity, wallet behaviour, digital asset movements and exposures that may extend across several transaction steps.

He said blockchain activity can offer high levels of transparency when firms have the tools and expertise to interpret it. The compliance challenge, in his view, is not a lack of visible data but the need to distinguish expected customer behaviour from genuine risk.

Foye gave sanctions exposure as an example. Contact with tainted funds should not automatically be treated as evidence of wrongdoing, he said. Investigators need to examine how the funds reached a wallet, how recent any connection to illicit activity may be, and whether the customer is dealing with sanctioned entities or has received assets that passed through multiple prior addresses.

Orchestration links systems and decisions

Compliance orchestration refers to the use of coordinated systems that bring data, workflow and decision-making into a single process. In Foye’s description, the model reduces the need for analysts to move between separate platforms during one investigation. Lower-risk activity can be processed faster, while cases with higher risk indicators can be escalated for review.

Foye said the approach can reduce manual administration, improve consistency, lower false positives, support stronger audit trails and help firms adjust controls as regulation changes. He argued that this adaptability is valuable for crypto businesses entering new markets or launching new products, because firms may need market-specific controls, additional screening requirements or new data inputs.

He also linked the issue to artificial intelligence. Foye said AI is already affecting transaction monitoring, sanctions screening, policy management and regulatory horizon scanning, while regulators are calling for governance, transparency and human oversight. He said AI can support compliance staff, but does not remove accountability for decisions explained to regulators, auditors and boards.

For traditional financial institutions expanding into digital assets, Foye said existing financial crime frameworks may not be enough on their own. He said blockchain analytics, on-chain transaction monitoring and crypto-specific typologies require specialist expertise and operating models that can combine diverse data sources.

This story draws on original reporting from Finextra Research.