How do crypto banks manage regulatory risk?

[nihalsari]

AML/KYC: Most banks implement robust AML/KYC frameworks.

Licensing: They operate under specific state or national licenses (e.g., BitLicense in NY, FCA in the UK).

Stablecoin & Treasury Policies: Funds are often held in regulated fiat or insured custodial wallets.

DeFi Interaction Limits: Some banks restrict direct exposure to high-risk DeFi protocols.

Even “advanced” users must understand that crypto banks act as a hybrid between a traditional bank and a custodian, with regulatory compliance shaping product offerings.