Every crypto transaction leaves a trail. But the question is who is there to actually read it. My next guest's company builds the risk and compliance infrastructure that regulators, institutions, and exchanges use to see who is behind illicit activity on-chain and to halt it before it becomes a headline. Joining me is Mriganka Pattnaik, CEO and Co-Founder of Merkle Science. Welcome to the show, Mriganka.
Hi Lucy. Great to be here.
Tell us what Merkle Science does and how long the company has been operating in the UAE.
Merkle Science provides blockchain analytics and forensics to detect illegal crypto activity. We label wallets on the blockchain as belonging to good actors — such as exchanges like Coinbase or Binance — or bad actors, such as sanctioned entities like Nobitex, which is an Iranian exchange, ransomware operators, child exploitation networks, and other illicit activity. This solution is used by financial institutions, crypto exchanges, and protocols for compliance — keeping criminal actors out of their systems. It is also used by law enforcement agencies to trace stolen cryptocurrency and catch crypto criminals. Merkle has been around since late 2018. We have been working with UAE clients for about five years, and we made a stronger investment in the region in the last year with a physical entity and presence here.
How does the digital asset ecosystem in the UAE compare to the US?
Both are very unique markets. The US has deep capital markets and a rich history of great technology companies. What the UAE has on its side is that it is now positioned as a global hub for financial services — with speed and a great regulatory regime. We are seeing a lot of our crypto customers set up a US entity for their US operations, and then set up their entire global operations in the UAE. What is common across both is that all regulators want the safe adoption of cryptocurrencies. The regional differences come down to local regulatory specifics — with VARA and ADGM in the UAE operating somewhat differently from the SEC and CFTC in the US.
What does illicit crypto activity actually look like today and where is it concentrated?
Based on our blockchain analytics data, we saw over $150 billion of illicit activity moving across wallets in 2025 alone. That is a conservative number — the actual figure is probably much higher. Crime in crypto has evolved. It started with exchanges that lacked KYC and AML policies, where criminals could easily monetise their holdings. As those exchanges improved, activity moved to DeFi. And what is particularly striking is that when we started the company, Bitcoin was where most criminal activity happened. Today, over 90% of criminal activity involves stablecoins. Just like consumers love stablecoins because they do not fluctuate, criminals like them for exactly the same reason — stable, fast, and able to move across multiple jurisdictions. Cross-chain bridges — where you can move funds between Bitcoin, Ethereum, and USDC very easily — have also become a major avenue for sophisticated criminal activity.
How is the compliance and risk management industry going to evolve from here?
AI is going to transform the cryptocurrency compliance space the same way it is transforming banking. Predictive blockchain analytics — figuring out what is next, predicting criminal transactions before they have even been discovered — is a major focus. Criminals are already leveraging AI. We are seeing large financial institutions use generative compliance solutions, with agents that can help them configure new risk policies, update existing policies, and detect criminals in real time. The reporting, investigation, and filing of criminal activity is also going to be heavily reliant on AI. Building agents on top of our data is a top priority — both for us and for the industry. Criminals are already a step ahead with the technology they use, and financial services need to make sure consumers are kept safe.
Well it sounds like you have your work cut out for you. Thank you for providing such a valuable service for the cryptocurrency industry at Merkle Science.
Thanks, Lucy, for having me.
