White-Label Crypto: Speed to Market, Risk to Reputation — and Maybe More

By David DeLeon and Duane Block at Accenture

Published on October 13th, 2025 in Payments

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Executive Summary

A combination of new crypto-friendly legislation, the appeal of crypto to younger generations, and a more liberal regulatory atmosphere have many banks and credit unions weighing their options.
White-label crypto programs look like a good way to get into this new business quickly.
But banks venturing into these opportunities must be clear on compliance and risk management responsibilities — and remember that all options come with reputation risks.

As digital asset adoption accelerates, financial institutions are weighing not just whether to get into the crypto and stablecoin space, but how. Some banks may ultimately build proprietary infrastructure, but many — including community banks and credit unions — are turning to white-label providers to fast-track their entry.

There’s a spectrum of products and services that these institutions can offer. These range from cryptocurrency trading and custody inside their digital banking apps to collateralized lending with custody of digital assets via a qualified third-party to accepting and settling U.S. dollar stablecoin transactions for business customers. They could also collaborate to co-brand a regulated stablecoin via a subsidiary or consortium. (Custody refers to various methods used to secure crypto assets.)

Industry partnerships can enable speed to market and reduced complexity, allowing institutions to launch branded digital asset products without traversing every twist and turn along blockchain’s learning curve. But with convenience comes risk — and regulators are watching closely.

Caution Flags Banks and Credit Unions Should Be Watching

The Wolfsberg Group, a global banking association that helps the industry navigate financial crime risks, recently shared guidance on the provision of banking services to fiat-backed stablecoin issuers that underscores the importance of understanding the full risk profile of stablecoin issuers, even when simply providing banking services to them.

Although this 2025 guidance precedes more prescriptive U.S. regulations, the Wolfsberg Group’s principles have remained remarkably consistent over the years. They will likely continue to serve as a model for U.S. regulatory frameworks.

In parallel, legislative efforts such as the GENIUS Act signed into law earlier this year — which mandates federal licensing and reserve requirements for stablecoin issuers — and the proposed CLARITY Act — aimed at resolving jurisdictional ambiguity between the Securities and Exchange Commission and the Commodity Futures Trading Commission — signal a shift toward more enforceable and defined compliance standards in the U.S. digital asset space. (GENIUS stands for Guiding and Establishing National Innovation for U.S. Stablecoins. CLARITY stands for Digital Asset Market Clarity.)

The message is clear: Financial institutions must look beyond surface-level compliance and incorporate on-chain insights, issuer due diligence, and continuous monitoring into their risk frameworks.

These insights include on-chain surveillance to analyze wallet activity, links to mixers and sanctioned addresses, exposure to smart contract/decentralized finance (DeFI) protocols, and signs of market manipulation or other potentially nefarious activities. (Mixers — cryptocurrency mixing services — blend potentially identifiable or “tainted” cryptocurrency funds with others, in order to conceal the original source of the funds.)

In white-label arrangements, where the institution’s brand may be front and center, the underlying infrastructure — and its vulnerabilities — often belong to someone else, making robust oversight especially critical.

Recent settlements with the New York Department of Financial Services (NYDFS) highlight the critical importance of compliance in crypto infrastructure partnerships. One case centered on a leading third-party provider, which was cited for shortcomings in anti-money-laundering protocols and insufficient oversight of its relationships with major exchange partners. These issues reflect a broader trend of insufficient third-party risk frameworks and weak governance that have become recurring themes across regulatory agencies in recent years.

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Outsourcing Doesn’t Insulate Banks from Compliance Responsibilities

There’s a key principle here: Outsourcing does not exempt institutions from meeting their compliance obligations, particularly in areas such as anti-money-laundering (AML), Know-Your-Customer (KYC), and sanctions enforcement.

Banks that rely on white-label services may, in some instances, bear responsibility for the issuer’s compliance failures, including deficiencies in risk management and internal controls.

The NYDFS has also released guidance on the use of blockchain analytics for transaction monitoring, emphasizing that compliance functions at covered banks “must adapt” by adopting new tools and technologies to mitigate emerging risks.

Before You Commit: What Will Be Your Compliance Duties?

White-label models sit on one end of an outsourcing continuum that can blur the lines of responsibility. Leading crypto infrastructure providers often offer multiple configuration options and accountability models that determine whether the institution or the partner has the primary regulatory responsibility for performing KYC, tax reporting and transaction monitoring.

Banks have several configuration options when partnering with crypto providers, each with distinct compliance implications:

1. Technology-Only Model

The bank uses only the provider’s technology or software, while retaining full compliance responsibility for its end customers. The bank operates a formal AML program and performs related duties such as KYC, sanctions screening, and ongoing monitoring. The bank files suspicious activity reports (SARs) and currency transaction reports (CTRs) when required.

2. Omnibus Model

In this setup, end users are customers of the crypto provider. The provider is responsible for AML activities for the crypto accounts it custodies. The bank maintains a separate AML program for its own customer relationships.

3. Fully Disclosed Model

In this arrangement, end users are customers of the crypto provider for trading and custody services. The provider handles segregated custody and performs AML activities for those customers. Meanwhile, the bank continues to operate its own AML program for its brokerage and wealth management activities, including onboarding, fiat platform surveillance, and filing SARs/CTRs as applicable (under FINRA Rule 3310 and 31 CFR 1023.210).

Institutions must carefully evaluate these options and the regulatory responsibilities they impose. Once an institution selects the model that best fits their products, capabilities and licensure, the oversight responsibilities must be clearly defined, communicated and governed.

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Risk Planning Must Include a Future Shift to an In-House Model

Without strong governance and controls, institutions risk creating blind spots that regulators will not overlook. This is particularly important as many institutions initially adopt a white-label model, but over time come to recognize the agility and economic advantages of bringing services in-house.

Risk frameworks must anticipate this evolution by accounting for these nuances from the start — not by bolting them on after launch.

This is where “risk management by design” becomes essential: embedding compliance into the architecture of digital asset products from day one, with the flexibility to adapt as outsourcing models and regulatory responsibilities change over time.

Here’s an example: Consider that AML and KYC risks in blockchain environments are uniquely complex. Transactions can be pseudonymous (executed in a fictitious name), cross-border, and rapid. Wallet addresses may not link to verified identities, and funds can flow through decentralized platforms with minimal friction.

If a white-label provider lacks robust controls, the institution’s exposure — operational, reputational and regulatory — can be severe.

This could lead to civil and criminal penalties for BSA/AML and sanctions failures, state regulatory actions and fines, heightened supervisory scrutiny or constraints (consent orders, business-line restrictions, growth limits), operational disruption, and ultimately reputational damage and customer attrition. A institution may also lose key vendor relationships as partners de-risk.

To succeed, banks must treat white-label partnerships with the same rigor as core banking functions.

That means conducting deep due diligence on providers, establishing clear oversight mechanisms, and continuously monitoring for compliance gaps. Due diligence should include reviewing the provider’s regulatory and legal status, compliance controls, risk management framework, security measures, and operational transparency.

Risk and compliance teams should be fully embedded in product development, helping shape solutions that are innovative, resilient and compliant.

The regulatory climate may have shifted, but the risks remain. Institutions that build strong foundations — even when those foundations are outsourced — will be best positioned to lead. By embedding compliance into digital assets architecture from day one and aligning with emerging regulatory guidance, they can innovate responsibly, protect their brand, and stay ahead of the curve.