Exchange Licensing Rules

Definition ∞ Exchange licensing rules are regulatory requirements imposed by governmental authorities that cryptocurrency exchanges must meet to legally operate within a specific jurisdiction. These rules typically cover aspects such as capital adequacy, anti-money laundering (AML) and know-your-customer (KYC) compliance, cybersecurity standards, and consumer protection measures. Adherence to these regulations is crucial for an exchange’s legitimacy and its ability to offer services to local residents. They aim to safeguard market integrity.
Context ∞ The evolving landscape of exchange licensing rules is a frequent topic in global financial news, reflecting efforts by nations to regulate the digital asset market. Different countries adopt varied approaches, creating a complex regulatory patchwork that exchanges must navigate. News reports often detail new licensing frameworks or enforcement actions against non-compliant platforms, impacting market access and operational strategies.