Definition ∞ A legal entity is an organization or individual recognized by law as having rights and obligations. In the digital asset sector, this often refers to a registered company, foundation, or other formal structure that operates a cryptocurrency exchange, issues stablecoins, or develops blockchain protocols. Establishing a legal entity provides a framework for accountability, compliance with regulations, and the ability to enter into contracts. It separates the organization’s assets and liabilities from its owners.
Context ∞ The requirement for digital asset projects to operate as recognized legal entities is a central aspect of regulatory discussions globally. News frequently reports on jurisdictions establishing clear guidelines for these entities, as well as companies structuring themselves to meet legal obligations, which is crucial for mainstream adoption and investor protection.
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