“High risk” is not a universal blacklist
The FATF increased monitoring list, the call for action list, national sanctions lists, and banks' internal country ratings differ in nature and consequences. In its June 2026 increased monitoring statement, the FATF made clear that inclusion on that list does not by itself require enhanced due diligence across the board or the severing of an entire category of customers. This does not prevent a jurisdiction from imposing stricter requirements under local law, nor does it preclude a bank from declining business based on its own capabilities. Lists and sanctions measures change, so today's lists should not be written into long-term product rules.
A licence may be applied for, but the business model must still be deliverable
The application materials should describe the customers' actual place of business, the source and destination of funds, the industry, the beneficiaries and the expected transactions. It is not acceptable to state only the company's place of incorporation in order to obscure its main markets. The UK FCA's requirement that applicants describe their target customers and risk management is a specific regulatory example. A bank may additionally require evidence that transactions are explainable, that evidence can be obtained, and that restricted payments can be identified; this is a bank cooperation assessment and does not mean the regulator has issued an additional “proof of legality”.
Account-opening inquiries must also be specific to the use case. A bank's statement that it accepts customers from a certain country may cover only specific industries, currencies, counterparties or amount arrangements, and does not mean it accepts all crypto-related funds from that country. Representative sample fund flows may be submitted, with a request to confirm which elements are supported and which are not. If the bank's preliminary response, the formal contract and the actual system permissions are inconsistent, this should be clarified before onboarding; the fact that a customer has already deposited funds must not be used to force the counterparty to accept risks that were not previously disclosed.
Hypothetical scenario: transactions in the same region must also be distinguished
Assume a certain region is rated high risk by a bank. A food importer with verifiable orders applying to make a payment, and a prohibited transaction involving a sanctioned entity, cannot be handled solely with the same enhanced due diligence form. The former may be accepted after further investigation, or may still fall outside the bank's policy; the latter, if it falls within applicable prohibitions, should be stopped in accordance with law or assessed for a licence, rather than substituting more information for legal authorisation.
Conduct feasibility validation first, then pay the costs of implementation
The main markets and transaction structures can be anonymised and summarised, then checked against acceptable boundaries with local lawyers and candidate banks before a formal application is made. For business that is permitted, the cost of manual investigation, backup channels and the ability to exit customers should be calculated. Any counterparty's preliminary indication of interest should not be described as a guarantee of account opening; if the core customer base is excluded by all available channels, the business plan needs to be adjusted rather than dealt with after the licence is obtained.
Recommended actions
- Establish separate lists for legal prohibitions, additional review and commercial non-acceptance, and mark the basis and the person responsible for updates.
- Disclose the main markets truthfully to candidate banks and retain written feedback and attached conditions.
- Estimate the investigation and disruption costs for high-risk customers, and determine the exit boundaries when such risks cannot be controlled.
This content is for general information only and does not constitute legal advice. Please consult a qualified lawyer about specific matters.
References
- Jurisdictions under Increased Monitoring - 19 June 2026 — FATF
- Sanctions Compliance Guidance for the Virtual Currency Industry — U.S. Department of the Treasury, OFAC
- Cryptoassets: What we expect to see in your application for registration — UK FCA
