CASP stands for Custodial Wallet and Exchange Service Provider, a term referring to entities that hold or control cryptographic keys on behalf of others. These providers facilitate transactions and asset management for users in the digital asset ecosystem. They assume responsibility for the security and accessibility of customer funds. CASPs are critical intermediaries for many individuals interacting with cryptocurrencies.
Context
The regulatory environment surrounding CASPs is a key discussion point, particularly concerning anti-money laundering and know-your-customer requirements. Their role in securing digital assets makes them central to financial stability and consumer protection efforts. Future developments include increased regulatory oversight and the standardization of security practices to mitigate risks associated with centralized custody.
The UK's formal integration of digital assets into FSMA mandates a fundamental overhaul of compliance and operational frameworks for all market participants.
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