Compliance Issues Impede Crypto Deals Between the US and Latin America

Recent data released by BRACKT AI has highlighted a compliance crisis that is severely hampering cross-border cryptocurrency transactions between the United States and Latin America. According to their assessment, a staggering 60-70% of top financial institutions in Latin America are unable to adhere to U.S. digital asset regulations. This failure to comply represents a substantial barrier that is blocking billions of dollars in potential deals.

Current Landscape of Crypto Regulations

The urgency of the situation is underscored by the Genius Act, which mandates that foreign companies must meet U.S. compliance standards for access to American markets. However, BRACKT AI’s data shows a troubling reality: there are currently no Latin American countries that have established comprehensive cryptocurrency regulations that align with U.S. standards. Instead, the regulatory framework across the region remains fragmented, with many nations lacking adherence to international guidelines, such as the FATF Travel Rule. As a result, U.S. regulators are demanding strict compliance from Latin American firms operating in environments with little oversight.

This disconnect is not merely a regulatory issue; it translates into significant economic consequences. Latin America has emerged as the fastest-growing cryptocurrency market globally, with transaction volumes reaching an astonishing $1.5 trillion by mid-2025, according to Chainalysis. Major banking institutions and fintech platforms in the region engage in substantial daily digital asset transactions. However, without the necessary regulatory infrastructure, these entities face barriers that prevent them from entering American partnerships. This hindrance is particularly evident in the burgeoning stablecoin sector, which has become essential for cross-border payments.

American businesses are experiencing the opposite dilemma. As they seek opportunities in Latin America, they struggle to verify whether their prospective partners can meet U.S. compliance standards, leading many to turn to intermediaries based in Europe or Asia instead. Consequently, Latin American institutions find themselves effectively locked out of U.S. capital markets, with deals often disintegrating upon discovering compliance gaps during due diligence.

Real Costs of Compliance Failures

Recent enforcement actions highlight the severity of these compliance challenges. For instance, Binance faced settlements totaling $4.3 billion in 2023 due to anti-money laundering (AML) violations, while TD Bank incurred costs of $3.09 billion for similar failures. As a result, American companies are increasingly unwilling to take compliance risks when engaging with foreign partners.

Dr. Ravishankar Chamarajnagar, CEO of BRACKT AI, expresses the gravity of this situation: “This isn’t just a paperwork problem; it’s an economic decoupling happening in real-time. American investors are missing out on growth opportunities in Latin America, while Latin institutions are shut out from U.S. capital. It’s a lose-lose situation.”

To address these compliance challenges, BRACKT AI is offering multi-jurisdictional compliance analysis that helps firms navigate the labyrinth of regulatory requirements. Their services focus on identifying and resolving regulatory deficiencies before they escalate into costly legal actions or potential deal collapses.

Dr. Chamarajnagar, a seasoned expert in compliance, leads BRACKT AI, bringing his extensive experience as a former Chief Product Officer at AppViewX and senior leadership roles at VMware and AirWatch. With BRACKT AI's innovative solutions, firms can better prepare themselves to engage in cross-border transactions that previously seemed impossible due to compliance hurdles.

As Latin America's crypto market continues to grow, the clash of regulatory frameworks presents both a challenge and an opportunity. By bridging these gaps, BRACKT AI aims to facilitate smoother transactions and unlock the economic potential of cross-border partnerships.