RegTech and SupTech in crypto: automation of compliance as a new infrastructure layer for MiCA and AML-regulation

Introduction

Compliance in the crypto sector is no longer limited to licensing, corporate structuring, or internal policies. The regulatory environment of the European market is gradually transforming from a framework of formal legal obligations into a technological architecture of continuous supervision. In this paradigm, compliance is not a one-time legal procedure but an algorithmic process embedded in business operations.

Regulatory technology (“RegTech”) and supervisory technology (“SupTech”) form the backbone of this shift. RegTech tools automate client verification, transaction monitoring, sanctions screening, and ongoing reporting, while SupTech systems enable regulators to analyse risks and control market actors without the need for permanent manual inspections. MiCA, AML-regulation, and sanctions screening do not merely increase the scope of obligations – they stimulate the emergence of an operational infrastructure in which compliance functions operate autonomously and predictably.

Within this environment, crypto companies are moving from reactive legal adaptation to proactive compliance engineering. The role of law firms is also changing – from the design of isolated documents toward structuring integrated legal-technical ecosystems that ensure auditability, continuity, and traceability of regulatory processes throughout the lifecycle of a crypto project.

RegTech as an operational layer of compliance

RegTech solutions introduce unified procedural logic to key risk management areas. Client onboarding becomes a verifiable workflow, with identity verification, sanctions screening, and risk scoring recorded as structured events with an immutable audit trail. Rather than fragmented manual checks, companies operate within a single compliance pipeline where every decision can be reproduced technically.

Transaction monitoring shifts from retrospective analysis to continuous behavioural supervision. Machine-readable rule sets identify deviations, generate alerts, and compile evidence packages that can be provided to auditors or supervisory authorities if necessary. This architecture reduces human error and ensures consistency between internal policies and their implementation.

The core value of RegTech lies in synchronising legal obligations with technical execution. When AML procedures, reporting schedules, or risk thresholds are defined at the policy level, RegTech instruments translate them into executable logic. Consequently, compliance becomes a structural element of the business model rather than an auxiliary function.

SupTech and the evolution of regulatory supervision

SupTech is the technological counterpart of RegTech for regulators. Rather than analysing documents after the event, supervisory authorities receive structured datasets, risk indicators, and aggregated transaction profiles in near-real time. This reduces dependence on local inspections and enables regulators to assess market stability at an infrastructural level.

In this model, reporting is not a one-off submission of forms but an ongoing channel for exchanging information. Companies integrate their RegTech environments with supervisory gateways to ensure transparency of risk processes, and regulators apply analytical models to detect anomalies, exposure concentrations, and atypical behavioural patterns.

This interaction forges a new model of regulatory trust. Automated systems generate verifiable operational evidence to confirm compliance, rather than companies relying on declarations or legal positions. This approach significantly enhances the predictability of supervisory assessments and reduces uncertainty for market participants.

Automation of AML/KYC and sanctions compliance under MiCA

The expansion of regulatory obligations in the European crypto market requires companies to maintain long-term records of client identification, source-of-funds verification, and transaction monitoring. Manually administering these processes creates operational fragmentation and increases the likelihood of inconsistencies between declared policies and actual practice.

RegTech tools solve this issue by embedding AML/KYC controls into client lifecycle management. Each verification stage logs and time-stamps the actions, linking them to specific decision paths. This system enables companies to show the procedural logic behind compliance outcomes.

Sanctions compliance follows a similar trajectory. Screening systems continuously update risk datasets and re-evaluate clients without disrupting business processes. The shift from sporadic checks to automated reassessment aligns corporate operations with supervisory expectations, particularly regarding cross-border crypto activities and multi-jurisdictional structures.

Within the MiCA environment, companies must use such technological architecture as a prerequisite for sustainable market participation. Automation preserves the continuity of internal controls, sustains proportionality of risk management, and establishes a transparent evidentiary basis for interactions with regulators.

RegTech-SupTech interoperability and auditability of processes

The emerging compliance infrastructure relies on interoperability between private RegTech systems and public SupTech platforms. Whereas supervision used to focus on formal documentation, the emphasis is now on machine-verifiable workflows, reproducible decisions, and consistent operational data.

Every compliance event – such as onboarding approval, alert review, or enhanced due diligence – becomes part of a verifiable chain of actions. This creates an auditable environment in which both businesses and regulators operate within a shared logic of traceability. The result is not merely increased regulatory pressure, but also greater structural resilience across the market.

This architecture also reshapes the role of advisors. Rather than merely drafting policies, legal support now extends to designing governance frameworks, escalation procedures, and evidence models that can be executed and validated inside automated systems.

Conclusions

Technology-driven compliance is redefining crypto. Companies now integrate legal and operational layers in unified systems—RegTech automates processes, and SupTech enables continuous oversight with structured data.

Together, RegTech and SupTech create predictable, auditable practices that align with regulation. Crypto businesses worldwide, including in Europe, must build these systems to grow and meet regulatory requirements.

At Manimama Law Firm

At Manimama Law Firm, we help businesses adapt to new regulations. We handle documentation, manage applications, and build long-term compliance strategies for crypto companies.