How to adapt AML infrastructure for stablecoins

Ross Freiman-Mendel of Persona shares how to apply TradFi risk-based AML strategies to stablecoins to improve compliance and crypto onboarding efficiency.

What AML/KYC lessons from traditional finance apply to global stablecoin and crypto businesses?

Over the years, banks and fintechs learned that effective AML compliance depends on intelligent risk allocation. Three core principles emerged: segment risk rather than treating all customers the same, monitor continuously rather than at fixed moments, and use automated workflows to scale the impact of compliance teams. In 2025, regulations like the GENIUS Act brought stablecoin issuers under Bank Secrecy Act requirements. For banks and fintechs entering crypto, this regulatory convergence means that existing AML expertise matters more than ever.

How do you onboard high volumes of crypto users quickly while balancing compliance rigor with user experience?

One of the biggest friction points for crypto and stablecoin platforms today is redundant KYC. Every time a user moves from one platform to another — like from a wallet to an exchange or from a crypto platform to a partner liquidity provider — they must reverify their identity.

For crypto users who expect to onboard quickly, reverification is an inefficient and frustrating experience. For platforms, repeat verifications can hurt conversion rates. Across the industry, 25–35% of users abandon onboarding when asked to upload an ID and selfie.

Reusable identity verification changes that. Once a user verifies their identity, they can provide explicit consent to share their data with other trusted partners. (That’s why we built Connect, a new way for crypto platforms to securely exchange KYC data via token-sharing.)

How do you manage KYC/KYB compliance for instant, cross-border stablecoin transactions while adapting to local regulations?

Platforms that enable cross-border stablecoin transactions can maintain strong compliance by investing in unified, globally scalable infrastructure that adapts to local requirements. In practice, this can look like:

Building compliance infrastructure that scales globally. Invest in infrastructure that covers 200+ countries and territories and connects directly with jurisdiction-specific sources.

Relying on one platform to orchestrate everything. A compliance stack that relies on multiple vendors can create operational complexity. Instead, consolidate reports and verifications into a single platform.

Using configurable risk flows. Different risk profiles should trigger different verification paths. Build workflows that adjust automatically based on factors like geography, transaction type, and user segment.

How can IDV tech and workflow orchestration reduce onboarding friction, increase conversion, and personalise crypto onboarding?

At Persona, intelligent automation is foundational to how we help our customers process millions of transactions every day without large review teams.

The core product for this is Dynamic Flow. It’s a no-code solution that gives compliance teams control over their workflows with a lower engineering lift. Teams can directly configure risk-based decision trees that ingest third-party data such as watchlists, device intelligence, and email or phone risk.

Dynamic Flow routes users through appropriate verification paths in real time based on passive signals. Low-risk users move through onboarding quickly, while high-risk signals trigger step-up verification. Dynamic Flow opens investigation cases for manual review only when multiple signals are triggered. When that happens, it presents all relevant identity data in a single view.

By verifying users dynamically, you can onboard new users faster while providing a better user experience. As Ahmed Siddiqui, Chief Payments Officer at Branch, puts it, ‘We can now seamlessly run step-up verifications for customers who would otherwise fail KYC verification, increasing conversion and reducing drop-off from legitimate customers.’

How can compliance teams become strategic partners that drive business growth and foster trust with all stakeholders?

We’ve seen compliance teams become strategic partners by building identity infrastructure that makes trust scalable. That infrastructure should:

Reduce manual review. Strong compliance programs typically favour automation over manual review when possible, and as it aligns with risk appetite. By using risk-based workflows and automated verification, teams can significantly reduce manual reviews, shorten onboarding times, and focus human effort only where risk is genuinely elevated.

Enforce rules through policy engines. Establish configurable compliance policies, like transaction limits, approval thresholds, whitelisting, and role-based permissions. By enforcing compliance consistently, you can lower operational risk and build confidence with regulators and partners.

Apply risk tiering across users and activity. With risk tiering, low-risk customers can onboard quickly with minimal friction, while higher-risk users and transactions trigger enhanced controls.

What emerging IDV, onboarding, and fraud monitoring trends will shape crypto over the next 2–3 years?

Over the next few years, crypto platforms will need to move beyond one-time onboarding toward layered identity signals, continuous fraud monitoring, and reuse of verified results to scale securely without adding user friction. This includes:

Taking a multi-modal approach to fraud detection. The rise of AI-generated fraud has rendered single-signal defences less effective. To meet the challenge, leading platforms are combining liveness checks, injection detection, device intelligence, and link analysis to detect coordinated attacks.

Applying continuous monitoring throughout the customer lifecycle. The risk of fraud increases after account creation, not just at onboarding. Ongoing behavioural risk scoring, watchlist screening, and pattern analysis can help surface emerging threats.

Building shared, network-aware identity infrastructure. When users must reverify over and over, conversion rates can plummet. Shared identity infrastructure lets trusted parties exchange verified results with user consent, while network-level signals reveal behaviour that individual platforms can’t spot in isolation.

This editorial is part of the Global Stablecoins Report 2026. Explore how stablecoins are moving from hype to utility for banks, merchants, and fintechs.

About the author

Ross Freiman-Mendel heads Product Growth at Persona, where he focuses on scaling portable identity, digital IDs, and agent KYC across the trust ecosystem. He leads product initiatives that enable secure, reusable identity verification for fintechs and crypto platforms. Ross's work centers on reducing onboarding friction while maintaining compliance rigor, helping businesses build identity infrastructure that makes trust scalable across global markets.

 

About Persona

Persona provides identity verification and fraud prevention infrastructure that helps businesses onboard users securely and compliantly. The platform offers government ID verification, biometric authentication, KYC/KYB compliance, AML screening, and continuous monitoring across 200+ countries. Persona enables fintechs, crypto platforms, and enterprises to verify identities quickly while reducing friction, leveraging reusable identity solutions and risk-based workflows to scale trust across the digital ecosystem.