Crypto compliance and fraud: Why AML and fraud need to work together in Web3
Guest: Stephen Sargeant
In this episode, I talk with Stephen Sargeant about a topic I think deserves a lot more attention from both sides of the industry, crypto compliance and fraud. Because if you work in fraud prevention or in AML, you already know there is overlap between those worlds. The problem is that overlap does not always turn into real collaboration.
And that matters more in Web3 than a lot of people realize.
Stephen brings a really useful perspective to this conversation because he has worked inside crypto compliance and investigations, and then made the shift into building community and education around the AML and compliance side of Web3. We talk about that career path, what drew him deeper into the space, and why he believes fraud and AML professionals should be learning a lot more from each other.
What I like about this episode is that it does not treat crypto compliance and fraud like two separate lanes that happen to touch occasionally. It treats them like connected disciplines inside a fast-moving ecosystem where customer trust, financial crime, platform risk, and regulation are all colliding at once. We also get into blockchain investigations, crypto regulations, practical entry points for people curious about crypto fraud careers, and why Stephen’s framing that fraud is AML in motion is such a useful way to think.
Because whether you work at a fintech, exchange, marketplace, bank, or just care about where digital risk is heading, the gap between fraud and compliance is becoming a lot harder to justify.
Why this topic matters to more than one audience
- Crypto compliance and fraud affects platforms, investigators, consumers, fraud teams, and AML professionals at the same time
- AML and fraud collaboration matters more when products move quickly and financial crime moves with them
- Fraud in Web3 is not only a crypto-native issue, it is part of a broader trust and customer protection problem
- Better collaboration between fraud and compliance can help businesses, users, and investigators all make better decisions
What you’ll hear in this episode:
- How Stephen moved from Bitfinex compliance work into building education and connection in Web3 compliance
- Why AML and fraud should work more closely together in crypto environments
- What blockchain investigations can reveal about customer harm, fraud patterns, and financial crime in crypto
- How crypto regulations can influence fraud prevention and customer trust
- What people interested in crypto fraud careers, crypto AML, or digital asset compliance should know before making the move
You should listen to this episode if you:
- Work in fraud, AML, compliance, trust and safety, fintech, or crypto and want a clearer view of crypto compliance and fraud
- Want better perspective on fraud and AML collaboration in Web3
- Are curious about blockchain fraud investigations, crypto AML, or digital asset compliance
- Care about crypto fraud prevention, crypto risk management, and financial crime in crypto
- Want practical insight into Web3 compliance, Web3 fraud strategy, or crypto career paths
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Episode notes & key takeaways
Why AML and fraud still operate too far apart
Let’s break this down.
One of the biggest themes in this conversation is that AML and fraud still operate more separately than they probably should. That is true in a lot of traditional financial environments, and it is especially noticeable in crypto. The work overlaps. The risks overlap. The customer harm overlaps. But the teams, language, and workflows are often still more divided than they need to be.
That is a problem.
Because when fraud and compliance do not talk enough, companies miss context. Fraud teams may see the immediate abuse pattern but not the broader laundering implications. AML teams may see the movement of funds and suspicious structuring but not fully understand the fraud event that created the money in the first place. That split can slow investigations and weaken response.
This is exactly why I think the phrase fraud is AML in motion is so useful.
It forces a different perspective. It reminds me that a lot of fraud is not just a customer loss event. It is also the beginning of a financial crime flow that moves somewhere next. And if I lose sight of that, I am only seeing part of the problem.
- Crypto compliance and fraud are often treated as separate disciplines even when the harm is connected
- AML and fraud collaboration can close gaps between immediate abuse detection and broader financial crime analysis
- Fraud in Web3 gets harder to understand when teams only see one part of the risk chain
- Financial crime in crypto often starts with the same customer harm events fraud teams are already investigating
Why Web3 changes the stakes for fraud and compliance teams
Here’s what’s actually happening.
Web3 creates a very different operating environment for both fraud and compliance teams. The products move fast. The user behavior can be unfamiliar. The money movement can be immediate. And in some cases, the lines between platform risk, user error, scam exposure, and deliberate abuse are a lot less clean than people want them to be.
That changes the job.
Because crypto compliance and fraud teams are not just trying to keep up with new terminology or new technology. They are trying to understand a system where the speed, transparency, and complexity of blockchain-based movement can create both better visibility and more urgent consequences at the same time.
That is where blockchain investigations become especially important.
The data may be public in ways traditional banking data is not. But interpreting that data, linking activity to real-world harm, and using it effectively inside an investigation still takes skill. And when those skills sit only in one department, companies can end up slower and less coordinated than they should be.
- Web3 compliance requires different instincts because product speed and money movement can compress risk quickly
- Fraud in Web3 often combines customer harm, technical complexity, and fast-moving asset flows
- Blockchain investigations create new opportunities for visibility, but only when teams know how to use them well
- Crypto risk management gets stronger when fraud and compliance teams build shared understanding instead of working in parallel
Why fraud professionals should care about compliance, and vice versa
This is where things get interesting.
A lot of fraud professionals still see compliance as adjacent to their work rather than central to it. And a lot of compliance professionals still see fraud as a separate specialty rather than something that should shape how they think about suspicious activity. I think that divide is getting less sustainable, especially in crypto.
Because if I work in fraud prevention, understanding compliance gives me a better read on downstream risk, suspicious flows, reporting logic, and where customer harm may be part of a bigger pattern. And if I work in AML or digital asset compliance, understanding fraud gives me a better grasp on how the money got there in the first place.
That is a huge difference.
It does not mean everyone needs to become the exact same kind of specialist. But it does mean cross-training and shared language can make both functions much stronger. That is one of the most practical takeaways in this whole conversation.
- Fraud and AML collaboration works better when each side understands more of the other’s world
- Crypto fraud prevention improves when fraud teams understand the broader financial crime chain
- Digital asset compliance gets stronger when investigators can connect suspicious movement to underlying fraud behavior
- Web3 fraud strategy benefits from cross-training because the risk does not stay inside one department
What this means for people interested in crypto careers
One of the most useful parts of this episode is that it does not just talk about the problem. It also talks about the people interested in entering the space.
That matters because a lot of professionals are curious about crypto fraud careers, crypto AML, or digital asset compliance, but they are not always sure where to start. And honestly, that uncertainty makes sense. The space moves fast. The language can feel dense. The roles can look unfamiliar from the outside.
What I like here is that Stephen makes the path feel more approachable without pretending it is simple.
If you are interested in moving into crypto compliance and fraud, the takeaway is not that you need to know everything first. It is that you need curiosity, willingness to learn, and enough context to understand how your existing fraud, investigation, or compliance skills might transfer. That is usually the more realistic entry point.
- Crypto fraud careers are often more accessible when people understand how their current skills transfer
- Crypto AML and digital asset compliance do not require perfection first, but they do require real curiosity and learning
- Web3 compliance roles can be a strong fit for people coming from fraud, investigations, or traditional financial crime work
- Career moves into crypto compliance and fraud get easier when people focus on transferable judgment, not just technical vocabulary
Why regulation may help more than some people assume
Regulation in crypto can be a loaded topic, depending on who you ask. But one of the things I appreciate about this conversation is that it treats regulation as something more practical than ideological.
Because from a fraud and customer trust perspective, crypto regulations can matter a lot.
They can create clearer expectations. They can reduce some forms of abuse. They can make it easier for platforms to justify stronger controls. And they can help customers understand that a product category is being held to standards instead of simply being told to move fast and hope for the best.
That does not mean regulation solves everything. It does not.
But when fraud in Web3 is affecting real users, real money, and real trust, I do think it is worth taking seriously the idea that better structure can help prevent harm instead of only responding after it happens.
- Crypto regulations can support customer trust when they improve clarity and accountability
- Fraud in Web3 may become easier to reduce when platforms have stronger compliance expectations
- Crypto compliance and fraud both benefit when regulation creates more consistent guardrails
- Customer protection in digital asset environments often depends on more than product design alone
The big takeaway from this episode is pretty straightforward. Crypto compliance and fraud should not be treated like neighboring topics that only occasionally overlap. In my conversation with Stephen Sargeant, what stands out most is that AML and fraud are often looking at different parts of the same problem, especially in Web3. The more clearly those teams collaborate, cross-train, and learn from each other, the better positioned they are to understand blockchain investigations, reduce customer harm, and build smarter, more trustworthy crypto risk management going forward.
