Navigating Compliance in a Rapidly Evolving Digital Asset Ecosystem

Darpan Khanna, Deputy Global Chief Compliance Officer, Kraken

Darpan Khanna is the Deputy Global Chief Compliance Officer at Kraken, bringing extensive experience in compliance and risk management across FinTech, banking, and crypto sectors. From leading EY’s regulatory compliance technology practice to shaping compliance programs at major fintech and banking organizations, Khanna has spent his career designing scalable frameworks that balance regulatory rigor with operational agility.

In an exclusive interview with Banking CIO Outlook, Khanna shared insights into the realities of operating in a rapidly evolving digital asset environment, the growing role of technology in scaling compliance operations, and the leadership skills required to manage risk across jurisdictions while enabling innovation.

Building Scalable and Adaptable Compliance Frameworks

Designing scalable, adaptable compliance frameworks starts with tone at the top. Compliance must be embedded in the organization's culture, not isolated to one team. Every function needs to understand the rules and standards that guide operations.

In crypto and digital assets, the regulatory ecosystem evolves constantly. Meeting current requirements is essential, but anticipating future changes is key. Often, this means exceeding regional standards to avoid reactive adjustments. Frameworks must adapt alongside regulations for long-term sustainability.

Technology plays a central role in enabling that scalability. Traditional models rely on manual processes, leading to bloated teams and inefficiencies. By contrast, intelligent automation, AI tools, and analytics boost productivity while keeping human oversight central.

For example, analysts once handled five to ten cases daily with legacy systems. Now, AI co-pilots synthesize data from multiple sources, allowing them to manage 20 to 40 cases. This lets us enter new markets and products without doubling staff, scaling compliance with business growth.

Evolving Skills for Modern Compliance Leaders

The expectations placed on compliance leaders have changed dramatically over the last few years. Foundational skills such as regulatory expertise, legal understanding, and experience in banking or financial services remain vital but are insufficient on their own.

"So building up that culture of compliance where compliance is not just a responsibility of the compliance team, but it’s really the entire organization that works as a unit."

Today’s compliance leaders must embrace technology, understanding how automation, AI, and analytics integrate into operations and can be used responsibly. They must be able to translate regulatory requirements into operational processes that technology can support effectively.

Operating across multiple jurisdictions adds another layer of complexity. Each region has its own regulatory nuances, expectations, and enforcement priorities. Our regional compliance officers work closely with local legal teams to ensure that global frameworks remain consistent while still being tailored to local requirements. Striking that balance requires strong communication, collaboration, and operational discipline. Technology enhances efficiency and quality, spotting patterns that manual reviews might miss. This strengthens outcomes and fosters trust with regulators, partners, and clients.

Balancing Compliance, Innovation, and Risk

Balancing regulatory adherence with innovation is a key challenge in digital assets. Crypto products, including decentralized finance (DeFi) structures, often introduce models that do not neatly fit traditional regulatory frameworks. Many jurisdictions view them as high-risk, subject to increased scrutiny.

Our approach is proactive rather than reactive. We conduct horizon-scanning, monitor peers, and assess developments. Where appropriate, we introduce additional controls that enhance client security and risk mitigation, even if they are not explicitly required by regulation. Taking these steps helps reduce uncertainty, build trust, and support responsible growth.

Compliance in this environment requires constant calibration to meet laws, anticipate changes, and support innovation. Technology, analytics, and intelligent automation are essential to achieving that balance. They enable us to manage regulatory complexity, implement controls effectively, and maintain a strong client experience without slowing innovation.

Advice for Emerging Compliance Professionals

For professionals building a compliance career, stay curious and hands-on. Theoretical knowledge is not enough; use products directly. For example, experimenting with DeFi wallets or tokens provides valuable insight into how products function and where potential financial crime risks may arise.

Be open to new tools and willing to experiment with innovative solutions. The compliance field is evolving quickly, and those who adapt will be best positioned to succeed. The most effective leaders are those who combine regulatory expertise, operational understanding, and technological fluency. By integrating these skills, compliance professionals can build robust yet flexible frameworks that support growth while maintaining trust and integrity in a fast-moving digital asset ecosystem.

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