NOMINIS Head of Sales Dennis Luks recently joined Michael Chmielewski on his Bitter & Bullish podcast, presented by Day1x.io, where they discussed the growing intersection between cryptocurrency, compliance, and real-world criminal activity.
The conversation moved beyond surface-level debates about crypto regulation and addressed a deeper issue: how financial crime actually operates across both digital and physical environments.
At the outset, Dennis summarised NOMINIS’ mission clearly. Rather than treating on-chain transactions as isolated data points, NOMINIS contextualises them within geopolitical developments, sanctions regimes, terror networks, and organised criminal ecosystems. What happens in the world is reflected on the blockchain, and meaningful compliance requires understanding both.
One of the central themes of the discussion was the tension between privacy and compliance.
Michael raised the familiar dilemma within crypto culture: users value financial autonomy and privacy, yet regulators and institutions require oversight. Dennis acknowledged this tension but reframed the conversation, stating that there is no such thing as “crypto crime” in isolation.
The crime itself occurs in the real world, while cryptocurrency functions as a financial tool used to facilitate it. If the criminal intent and operational infrastructure originate off-chain, then compliance systems that examine only wallet activity without real-world context will inevitably fall short.
The discussion turned to terror financing, which Dennis argued is not addressed with sufficient urgency in mainstream crypto conversations, given the total suspected illicit crypto funds tripled between 2024 and 2025, from $50 billion to $150 billion. He highlighted the growing role of stablecoins in illicit financial flows:
“90% of terror activity is originating from stablecoin”
and emphasised the importance of combining on-chain analytics with open-source intelligence to identify the real-world actors controlling wallet infrastructure. Blockchain transparency alone does not reveal intent. Michael shared in the collective responsibility of exchanges and crypto entities to perform proper compliance to prevent Terror Financing, sharing he wouldn't be able to sleep at night, knowing we were funding terrorism’.
Dennis also distinguished between KYC and KYT, noting that while identity verification remains important, transaction monitoring is critical to understanding indirect exposure. KYC provides a snapshot of an identity, but does not assess the behaviour of a user. Sophisticated actors can circumvent onboarding checks, but their funds still leave a trail. Banks, just like exchanges, must be able to demonstrate where money is coming from, not just who is moving it.
In a broader reflection on financial evolution, Dennis and Michael compared traditional banks to Blockbuster in the Netflix era. Just as streaming and cloud infrastructure reshaped their industries, crypto and blockchain are reshaping finance. Banks cannot remain static; to stay relevant, they must actively engage with digital asset innovation rather than resist it.
The interview ultimately framed compliance as a responsibility rather than a formality. As digital assets integrate further into global finance, the challenge is not choosing between openness and security, but building systems capable of supporting both.
To watch the podcast in full, click here
Michael Chmielewski is the host of Bitter & Bullish, and Head of Product and Growth at Day1 Exchange. Day1x.io is an Australia-based crypto exchange and NOMINIS partner. To find out more, click here.
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