Dealer licensing refers to the official permission required for individuals or firms to conduct dealing activities in financial markets. This regulatory requirement ensures that entities acting as intermediaries in the buying and selling of securities or other financial instruments meet specific capital, conduct, and operational standards. For digital asset markets, the application of traditional dealer licensing frameworks is a complex and evolving area. Such licenses aim to protect investors and maintain market integrity by vetting participants.
Context
The question of applying dealer licensing to virtual asset exchanges and crypto brokerages remains a central regulatory challenge globally. Jurisdictions are debating whether existing securities laws adequately cover digital asset trading activities. Future legislative efforts will likely clarify the specific licensing obligations for various types of digital asset dealers.
The UK's draft regime mandates that crypto exchanges and dealers adopt traditional finance standards for resilience and client protection, setting a clear divergence from MiCA.
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