Definition ∞ An Alternative Trading System is a non-exchange venue for trading securities. In digital asset markets, an ATS functions as a private trading platform that matches buyers and sellers outside of conventional public exchanges. These systems often facilitate transactions for less liquid assets or offer tailored trading functionalities. Their operation typically involves direct order matching or brokered arrangements, distinct from the open order books of regulated exchanges.
Context ∞ The regulatory landscape surrounding ATSs in the digital asset space is continuously evolving with jurisdictions assessing how to classify and oversee these platforms. Discussions center on investor protection, market transparency, and the potential for regulatory arbitrage compared to traditional exchanges. Future developments may involve clearer guidelines for digital asset ATS registration and operational standards.
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