The crypto industry is global by nature, yet compliance remains highly fragmented. For Virtual Asset Service Providers (VASPs), navigating regulatory differences across jurisdictions is one of the biggest operational challenges. From AML/CFT obligations to the Travel Rule’s uneven adoption, compliance teams must ensure their processes meet evolving requirements, without slowing down business growth.
So, how can VASPs stay compliant while expanding across multiple regulatory environments? The key lies in interoperability, automation, and proactive compliance strategies.
The Challenge of Cross-Border Compliance
Each jurisdiction enforces its own version of crypto compliance, often with varying Know Your Customer (KYC), Anti-Money Laundering (AML), and Counter-Terrorist Financing (CFT) regulations. On top of that, the Travel Rule, which requires VASPs to exchange transaction details, is not universally enforced, leading to the Sunrise Issue, where compliant VASPs struggle to transact with non-compliant counterparties.
This often leads to inconsistent compliance expectations across borders, operational inefficiencies due to mismatched regulatory requirements, and increased risk exposure for VASPs engaging in cross-jurisdictional transactions.
A one-size-fits-all compliance approach doesn’t work in this environment. Instead, VASPs must adopt a flexible, scalable strategy that accommodates regulatory diversity while enabling growth.
For a deeper dive into 2025 compliance challenges and resolutions, check out this article.
Key Strategies for Cross-Jurisdictional Compliance
Use an Interoperable Travel Rule Solution
Since not all VASPs use the same protocol for Travel Rule compliance, firms need an adaptable and interoperable solution to ensure seamless transactions across different frameworks. Some rely on open protocols managed by industry groups or foundations, while others use privately managed systems developed and maintained by companies. Ensuring compatibility across these protocols is essential for secure, efficient, and scalable compliance operations in a fragmented regulatory landscape.
Without interoperability, these protocols can become compliance silos, where VASPs struggle to exchange information across fragmented networks, leading to inefficiencies and transaction delays. By adopting a Travel Rule solution that supports multiple compliance networks, VASPs can break down these silos, avoid transaction bottlenecks, and maintain secure, reliable counterparties across jurisdictions.
Solve the Sunrise Issue Proactively
The Sunrise Issue presents a major hurdle for VASPs operating internationally. As some regions enforce Travel Rule requirements while others remain unregulated, compliant VASPs often face a compliance gap, where regulated entities must exchange information with unregulated counterparties.
How can VASPs address this challenge? Rather than waiting for global harmonization, compliance teams can take a proactive approach to onboarding and verification. Ensuring that counterparties meet basic compliance standards even in jurisdictions where regulations are still evolving, helps reduce transaction delays and mitigate regulatory risk.
Automate Compliance Across Jurisdictions
Global compliance doesn’t mean more manual work. VASPs operating across multiple regions should:
Monitor transactions for AML/CFT compliance
Screen counterparties against multiple sanctions lists
Report transactions based on varying regulatory requirements
Automation helps compliance teams reduce friction by streamlining risk assessments, real-time monitoring, and jurisdiction-specific reporting. By integrating real-time compliance notifications, firms can stay ahead of regulatory changes and act swiftly on alerts. Check out this article on Webhooks for insights into how automation can improve compliance workflows.
Stay Agile with a Modular Approach
Regulatory landscapes shift rapidly. A compliance strategy that works today may be outdated tomorrow. Instead of rebuilding systems from scratch, firms should opt for modular compliance solutions that allow them to:
Adapt to new regulatory requirements without disrupting existing processes
Integrate additional risk controls as needed
Ensure compliance remains scalable as regulations evolve
By maintaining flexibility in compliance frameworks, VASPs can keep pace with regulatory changes while maintaining operational efficiency.
Cross-Jurisdictional Compliance as a Competitive Advantage
Navigating compliance across multiple jurisdictions is not just about ticking regulatory boxes but also about ensuring long-term operational resilience. Firms that embrace adaptability and automation will be better positioned to scale efficiently, mitigating compliance risks before they become roadblocks to growth.
By focusing on interoperability, proactive compliance, automation, and adaptability, VASPs can transform regulatory complexity from a challenge into a structured, efficient strategy. As regulations evolve, a compliance-first approach does more than just meet legal requirements, it creates stability, builds trust, and supports sustainable expansion in an increasingly regulated global crypto ecosystem.
