Picture a crypto business that, within two years of launch, is serving customers in the UAE, the UK, the EU and Singapore. Its product, team and revenue all expand in step. Yet the compliance function meant to support that growth rarely keeps pace, and that mismatch is quietly becoming one of the sector’s biggest risks.
According to Sherlocq, the issue is seldom a lack of willingness. Founders accept that compliance matters, and legal teams are aware of the relevant frameworks. However, awareness of the rules is very different from running a live regulatory research operation across multiple jurisdictions. It is in that gap that firms tend to come unstuck.
On paper, the process looks simple: track regulatory change in every market, link new obligations to internal processes, revise policies, train staff and keep records ready for audit. In reality, many firms rely on a fragmented set of workarounds. A general counsel may skim regulator newsletters, a compliance officer may manually check the Financial Conduct Authority (FCA) website, and a consultant brought in to secure a Virtual Assets Regulatory Authority (VARA) licence in the UAE may disappear once approval is granted. The result is research that is reactive, patchy and stretched thin against the sheer volume of change.
Each regime also moves at its own rhythm. VARA’s framework develops on a different timeline from the EU’s Markets in Crypto-Assets (MiCA) regulation, while the Monetary Authority of Singapore’s (MAS) licensing requirements bear little resemblance to the FCA’s Travel Rule guidance. Attempting to juggle all four without a proper system is effectively an unrealised liability.
The consequences are tangible. Overlooking an anti-money laundering update under MiCA can prompt action from a European national competent authority. Relying on an outdated reading of the UK’s crypto promotion regime, which was tightened considerably in 2023, can lead to FCA enforcement and lasting reputational harm. In Singapore, firms that failed to meet MAS expectations for Digital Payment Token providers have lost their licences.
Beyond fines, there is remediation work, heightened supervision, scrutiny of senior leaders and costly emergency legal support. Most such failures share one cause: nobody had a dependable way of identifying what they were missing.
This is the challenge RegTech firm Sherlocq aims to address. Instead of compliance teams combing through regulator websites, the platform allows them to pose a direct question and receive a structured, sourced answer drawn from regulatory material across jurisdictions. Its coverage extends to consultation papers before they become binding, as well as enforcement actions that reveal where supervisors are focusing.
For a firm holding a VASP registration in the UAE, FCA cryptoasset registration in the UK, MiCA obligations in the EU and a Major Payment Institution licence in Singapore, the aim is to assess its full regulatory position in minutes rather than days, with every answer traceable to its source.
The crypto firms that endure may not be those with the strongest technology or the largest market share, but those that embedded compliance early enough that it never became their undoing.
Vinit Shah, former general manager, VARA, strategic advisor, Sherlocq, said, “Digital asset businesses have scaled their products and their revenues. What has not kept pace is the compliance infrastructure underneath. In crypto, that gap does not stay invisible for long — it surfaces in supervisory action, licence risk, or emergency legal costs that dwarf anything a proper system would have cost.”
Bhavin Shah, founder and CEO, Sherlocq, added, “Crypto compliance is not one jurisdiction. It is four frameworks, evolving at different speeds, with different enforcement priorities. Firms operating across UAE, UK, EU, and Singapore cannot afford to guess what each regulator expects. They need a single, structured view – and they need it current.”
Read the full Sherlocq post here.
By Daniel Willis, Editor of RegTech Analyst
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