AFM SREP 2025: Why Crypto Accounting Software Is Key to Effective Controls
The Dutch Authority for the Financial Markets (AFM) has released its SREP Market Picture 2025, and the message is clear: having policies on paper is not enough. Firms must demonstrate that their controls work in practice. For crypto businesses, this is where crypto accounting software becomes essential. It provides the audit trail, automation, and transparency needed to prove compliance.
The SREP Market Picture 2025: Key Findings
The AFM's Supervisory Review and Evaluation Process (SREP) assesses the risks and controls of financial institutions. In the 2025 edition, the regulator observed that many firms have the basics in place but fall short in execution. Internal control and ICT risks are particular areas needing improvement. The AFM stresses that policies must be demonstrably effective in day-to-day operations.
| Area | Observation | Requirement |
|---|---|---|
| Internal control | Policies exist but are not consistently applied | Evidence of execution, e.g., automated reconciliations |
| ICT risk | IT systems lack robust oversight | Stronger governance and monitoring tools |
| Compliance | Documentation is present but not integrated | Integrated systems that link policy to practice |
For crypto firms, these findings are particularly relevant. The fast-moving nature of digital assets amplifies the need for real-time controls. Crypto bookkeeping software can automate transaction monitoring, ensuring that every trade is captured and classified correctly.
Bridging the Gap Between Policy and Practice
The AFM's message is that a compliance manual is not sufficient. Firms must show that controls are embedded in daily workflows. Digital asset accounting software helps bridge this gap by providing a single source of truth for all crypto transactions. It enables firms to reconcile data from exchanges, wallets, and blockchains automatically, reducing manual errors and improving audit readiness.
For example, a firm might have a policy requiring segregation of duties. Without proper software, enforcing this policy manually is error-prone. With crypto accounting software, role-based access and automated approval workflows make the policy a reality.
ICT Risks and the Role of Technology
ICT risk is a major focus of the SREP 2025 report. The AFM expects firms to have robust IT governance, including regular testing and monitoring. For crypto firms, this means ensuring that the technology stack is secure and compliant. Enterprise crypto accounting software often includes features like multi-signature controls, audit logs, and integration with custody solutions, which directly address ICT risk requirements.
Automation as a Control Mechanism
Automation is not just about efficiency; it is a control mechanism. When transactions are automatically imported and reconciled, the risk of human error or manipulation decreases. The best crypto accounting software platforms offer real-time dashboards that give management and auditors visibility into financial data. This aligns with the AFM's expectation that controls are not just designed but actively monitored.
How Crypto Accounting Software Meets SREP Expectations
The SREP process evaluates a firm's business model, governance, and risk management. For crypto firms, demonstrating robust accounting and reporting is critical. Crypto accounting software provides a crypto sub-ledger that integrates with general ledgers, ensuring accurate financial reporting. This helps firms meet the AFM's standards for internal control and ICT risk.
| SREP Requirement | How Crypto Accounting Software Helps |
|---|---|
| Effective internal control | Automated reconciliation and audit trails |
| ICT risk management | Secure data handling and role-based access |
| Compliance demonstration | Real-time reporting and documentation |
By implementing such software, firms can move from a reactive to a proactive compliance posture. The AFM's report is a reminder that regulators are looking for substance, not just form.
Illustrative Scenario
To illustrate how this applies in practice, consider the following scenario: A mid-sized crypto exchange in Amsterdam, led by CFO Eva de Vries, has a comprehensive compliance policy. However, during a mock audit, the internal team finds that trade reconciliations are done manually and often lag by days. Eva decides to implement crypto accounting software from CryptaCount. Within weeks, the firm has automated reconciliations, a live crypto sub-ledger, and audit-ready reports. In the next SREP review, the AFM notes the improvement in control execution, reducing the firm's risk score.
Source: AFM Netherlands