AI is coming for crypto compliance, just not the way most people think

By Pierre Gérard, CEO and co-founder, Scorechain

When we founded Scorechain in Luxembourg in 2015, “blockchain analytics” was not yet a category. We spent the first few years explaining to banks and regulators why the transparency of a public ledger was an opportunity rather than a threat. A decade later, I am watching the same misunderstanding attach itself to artificial intelligence (AI), and it is costing the industry time it does not have.

Two stories dominate the conversation. The first says AI will soon replace compliance teams altogether. The second says AI is too unpredictable to let anywhere near regulated financial activity. I do not believe either one, and I say that as someone whose company has risk-assessed more than 2,800 virtual asset service providers (VASPs) since 2015, and has spent the past two years adding AI where it genuinely helps, as a separate layer rather than something baked into the compliance tools our clients depend on.

Start with the problem that every compliance officer I speak to raises within the first five minutes: noise. A sanctions screening system tuned the way a nervous bank tunes it can throw off false positives on the order of 95%. Transaction monitoring is not far behind. So a trained analyst, someone who understands typologies and can read a fund flow, spends the bulk of the working day clearing alerts that were never risks: dismissing name matches on a common surname, reading five adverse media hits that turn out to describe a different person entirely. Each of those adverse media checks takes an analyst 10 to 20 minutes. That is the actual texture of compliance work today, and it is why good people burn out of the profession.

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