Definition ∞ An exchange compliance framework comprises the rules, procedures, and systems that cryptocurrency exchanges implement to meet legal and regulatory requirements. These frameworks typically cover anti-money laundering (AML), know-your-customer (KYC) protocols, sanctions screening, and market surveillance. Their purpose is to prevent illicit financial activities and protect consumers within the digital asset trading environment. Adherence to these guidelines is essential for operational legitimacy.
Context ∞ The development and enforcement of exchange compliance frameworks remain a paramount concern for regulators globally. A central debate involves harmonizing these frameworks across different jurisdictions to prevent regulatory arbitrage. Future efforts will likely include advanced technological solutions for transaction monitoring and enhanced data sharing among regulatory bodies to strengthen the integrity of digital asset markets.
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