Covered Exchanges

Definition ∞ Covered exchanges are cryptocurrency trading platforms subject to specific regulatory oversight. These platforms operate under a defined legal or supervisory framework, requiring adherence to rules concerning anti-money laundering (AML), know-your-customer (KYC) procedures, and consumer protection. The designation often comes from national or regional financial authorities, aiming to mitigate risks associated with illicit financing and market manipulation. Operating as a covered exchange provides a degree of legitimacy and trust for participants.
Context ∞ Discussions surrounding covered exchanges are prominent in news related to global cryptocurrency regulation and institutional adoption. The expansion or contraction of the list of covered exchanges in various jurisdictions directly impacts market access and liquidity for digital assets. Regulatory bodies continuously refine the scope and requirements for these platforms, shaping the operational landscape for crypto businesses and investor confidence.