Definition ∞ Non-Compliant Tokens are digital assets that do not meet the legal or regulatory requirements of a specific jurisdiction. This non-compliance can stem from inadequate disclosures, improper registration, or failure to adhere to anti-money laundering standards. Such tokens pose significant legal and operational risks for issuers and holders.
Context ∞ The primary discussion surrounding Non-Compliant Tokens focuses on regulatory enforcement actions and the potential market impact of such designations. Regulators are actively pursuing entities issuing or trading tokens deemed to violate securities laws or other financial regulations. Observing legal outcomes and evolving regulatory guidance will provide clarity on acceptable practices for digital asset offerings.