APAC Banks Risk Missing Crypto Blind Spots

Financial institutions across APAC are facing a significant blind spot when it comes to crypto risk exposure. Claudia Hui, TRM Labs' APAC Compliance Lead, recently highlighted this issue during an interview at Coinfest Asia.

Hui emphasized that traditional banks often assume they're immune to digital asset risks if they don't offer crypto trading or custody services. However, she stressed that high-net-worth clients, payment gateways, and corporate accounts are already exposed to on-chain flows.

According to Hui, the concept of indirect risk doesn't exist in traditional finance. In contrast, blockchain ecosystems move value across complex multi-hop pathways, obscuring origin and destination unless properly indexed.

To address this challenge, TRM Labs is working with law enforcement agencies and central regulators to track and recover illicit funds. The company utilizes tools like the Beacon Network and ChainAbuse, a community reporting platform, to link law enforcement attributions directly with financial institutions.