Onboarding is where many crypto products break. New users stall at identity checks, get overwhelmed by passkey management, or leave before they fund their accounts. What should be a quick start ends up as a conversion cliff.

Fixing crypto onboarding requires rethinking the experience from the inside out. Below, we’ll discuss what a modern crypto onboarding experience needs and how to onboard people in a way that works.

What’s in this article?

• Why is onboarding the hardest part of crypto adoption?
  
• What steps define a complete onboarding process?
  
• How do design and compliance intersect in onboarding flows?
  
• What are common friction points for users?
  
• What are best practices for crypto onboarding?
  
• How Stripe Payments can help
  

Why is onboarding the hardest part of crypto adoption?

As of 2024, just 6.8% of the global population holds crypto. One of the main reasons why the vast majority of people are still hesitant is the overly complicated onboarding process. Identity verification can cause major drop-off, with some platforms reporting that up to 70% of potential users abandon the process because the flow feels slow, confusing, or too risky.

The typical crypto onboarding process asks for a lot of personal information and prompts users to make decisions about crypto concepts that might be new to them. That’s fine for someone who’s ready to go deep, but the crypto-curious and crypto-hesitant might opt out.

For enterprise users, the issues are complexity over time, following up with Know Your Customer (KYC) requirements, unclear compliance workflows, and back-and-forth over documentation. If onboarding drags on, internal buy-in can start to evaporate.

Onboarding is a crypto product’s first moment of truth. If it feels slow, risky, or opaque, you risk losing new customers.

What steps define a complete onboarding process?

Crypto onboarding is a layered process that guides someone through identity checks, wallet setup, payment access, and education. Here’s how the onboarding flow typically looks.

1. Account creation

This part should be fast: it requires just email, password, and maybe a name or country, if needed for risk checks. Get users in the door before you ask them to unpack their whole wallets. Leading platforms minimize drop-off by making this part as simple as possible. Some offer OAuth or one-tap sign-in, which can boost conversion about 20%–40%.

2. Identity verification

This is the point where users are likely to quit, depending on how the flow is built. Platforms that treat KYC like a product experience can see higher completion rates and fewer support tickets. Strong flows use the following:

• Tiered KYC: Ask for minimal info up front for small-volume use. Collect more information only when usage triggers higher risk thresholds.

• Fast, embedded checks: Mobile-native doc scanning and selfie capture can verify users in seconds.

• Microcopy that builds confidence: Adding a statement like, “This usually takes 90 seconds,” or a short explanation of why ID is needed can help build trust and reduce abandonment.

3. Custody of wallets and keys

Where will funds live? New users are often given custodial wallets, while advanced users might want to bring their own or set up self-custodial wallets. Effective onboarding helps users make a custody decision without assuming deep knowledge of key management. Some platforms also let users switch later (from hosted to self-custody) as they grow more confident. User-friendly flows tend to offer this choice early and design both paths to feel safe.

4. First transaction and education

Onboarding should walk the customer through actions in context, with clear tooltips, short explainers, or timed nudges. A guided demo can move a user from curious to committed quickly.

How do design and compliance intersect in onboarding flows?

Effective onboarding design drives conversion while passing legal muster. That’s the dilemma every crypto team must address: how do you keep the experience clean and fast when KYC, Anti-Money Laundering (AML), and risk controls are nonnegotiable? When design and compliance teams collaborate early, onboarding becomes faster, safer, and more trustworthy.

These are the principles to balance design and compliance.

KYC at the right time

Choosing when to require identity verification is a major decision. Some platforms front-load KYC at sign-up, but others delay it until the user wants to deposit, trade, or withdraw. Delaying can often improve conversion because users who’ve had time to explore are more likely to stick around through a few extra steps. The optimal timing depends on your jurisdiction, product model, and risk tolerance. Teams that treat timing as a design lever can make informed trade-offs.

Compliance that feels human

Design strongly influences how compliance feels. For example, microcopy such as, “This protects your account,” or, “Takes under 2 minutes,” can lower anxiety as users move through identity checks. So can breaking big forms into smaller steps or showing a progress bar. Another effective measure is to design a flow that runs checks in the background (e.g., prefilling a user’s country based on their IP, screening names against sanctions lists and watch lists).

Right-sized identity checks

Not all users need the same level of scrutiny. A risk-based onboarding system can adapt checks based on factors such as user behavior, region, and transaction size. For instance, a new user who’s buying $25 of Bitcoin shouldn’t face the same checks as an institution that’s buying $250,000. Well-designed flows adjust the process dynamically, while keeping the experience clear and user friendly.

What are common friction points for users?

Onboarding challenges look different across audiences. Retail users drop out for one set of reasons, while institutions encounter a different set of obstacles. Knowing the difference is how you avoid building overly complicated flows.

These are some common challenges for different types of users.

Retail users

Retail drop-off tends to happen early in the onboarding process. People often leave when forms are long or unclear, ID upload fails or takes too long, or if the app looks or feels unsafe. They might also quit if they’re forced to make decisions about things they don’t yet understand (e.g., custody, gas fees, seed phrases). Retail users often expect intuitive, fast, mobile-friendly experiences. If onboarding feels confusing, slow, or untrustworthy, many won’t complete it.

Funding is another hurdle. Many platforms still lack local payment methods, especially outside North America and Europe. If a user can’t easily add funds, they might abandon the process.

Institutional users

Institutional users are less likely to flinch at KYC because they expect due diligence. The risk rises when the process drags on, expectations aren’t clear, or support feels too hands-off.

Custody adds another layer of difficulty. Institutions often use third-party custodians, and setting up custody requires coordination, secure application programming interface (API) integrations, and detailed permissions.

The onboarding flow for institutions should feel more like a white-glove integration than a self-serve app. Dedicated reps, clear documentation, and fast turnaround can make onboarding workable for enterprises.

What are best practices for crypto onboarding?

In crypto, onboarding is the product. When it works, users sign up and stick around. You can spot a mature onboarding flow by how well it balances three things: clarity, flexibility, and trust. The best flows might look light, but they handle risk, compliance, and education behind the scenes.

Here’s what that looks like in practice.

Simple entry

• Keep registration as short as possible—typically just email, password, and location.

• Use progressive profiling to collect more information only when needed.

• Offer single sign-on (SSO), autofill, and OAuth options to minimize friction.

Tiered, adaptive verification

• Match KYC depth to the user’s intended activity or transaction limits.

• Automate ID checks when possible, but let users know what’s happening and why.

• Adjust flows dynamically by country or risk profile to meet regulatory requirements without burdening low-risk users.

Embedded education

• Explain terms in context: tooltips and microcopy are user-friendly alternatives to glossaries.

• Time learning to actions.

• Guide users through their first transactions with helpful prompts or demos.

Trust by design

• Be transparent about security steps and data handling.

• Use a clear user interface (UI) and familiar cues such as progress bars and confirmation modals.

• Localize flows for regional payment methods, IDs, and compliance expectations.

Constant improvement

• Gather data at the funnel.

• Watch where users drop off.

• Test and improve to increase completion rates.

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