Definition ∞ Compliance Perimeter Tightening refers to the expansion and reinforcement of regulatory boundaries and requirements for financial entities. This action typically involves stricter enforcement of anti-money laundering and know-your-customer rules. The objective is to mitigate illicit financial activities and enhance market integrity. Such measures increase operational obligations for businesses operating in regulated sectors.
Context ∞ The digital asset sector is currently experiencing significant compliance perimeter tightening as global regulators seek to mitigate risks associated with illicit finance and consumer protection. Discussions frequently concern the implementation challenges for crypto businesses adapting to these stricter rules. This regulatory posture aims to bring digital asset markets more in line with traditional financial standards.