We built compliance systems to fight financial crime. Instead, we created honeypots.
In this conversation, Beth Haddock — General Counsel at AdvisorEngine, board director at GMO-Z Trust (a NY-regulated stablecoin issuer), and policy lead at The Stablecoin Standard — breaks down what's broken with legacy compliance and the emerging framework to fix it.
The Stablecoin Standard just released a white paper that regulators actually asked for: "Programmable Compliance for Digital Money and Assets." We dig into the core ideas:
→ Why the "consent" model in financial services is a fallacy
→ How data collection meant to reduce risk creates new risk (the honeypot problem)
→ The 4-layer compliance taxonomy: Prevent, Detect, Trace, Protect
→ Why no single RegTech vendor covers all four — and what that means for builders
→ The critical distinction between AML and cybersecurity (and why conflating them is dangerous)
→ How AI changes the compliance paradigm without replacing compliance officers
→ What Beth is advocating for in the GENIUS Act and global policy discussions
If you're in fintech, compliance, RegTech, or digital assets — or just trying to understand where financial infrastructure is heading — this one's for you.
References:
BIO -Beth Haddock / bethhaddock is a strategic advisor, General Counsel, and board member with a track record of helping fintech and digital asset companies execute on growth, innovation, and regulatory complexity. She currently leads legal and compliance at AdvisorEngine, a Franklin Templeton-backed platform, and advises top DeFi projects and Web3 ventures including Grayscale, Balancer, and Orca.
Beth serves on the board of GMO-Z Trust Company, a NYDFS-regulated stablecoin issuer, and helps shape global policy through The Stablecoin Standard - https://www.stablecoinstandard.com/. With 25+ years of experience across firms like Guggenheim, Brown Brothers Harriman, and AXA, she brings hands-on legal and strategic support to companies scaling new products, entering new markets, or managing regulatory inflection points.
A frequent speaker, CoinDesk cont
