Non-custodial platforms are digital asset services where users retain direct control over their private keys and, consequently, their digital assets. Unlike custodial services, these platforms do not hold user funds, thereby reducing counterparty risk. Examples include certain decentralized exchanges and self-custody wallets. Their design prioritizes user autonomy and minimizes reliance on intermediaries.
Context
The regulatory treatment of non-custodial platforms in the digital asset space is a complex and evolving area, as traditional financial regulations often assume a custodial relationship. A key debate concerns how to apply anti-money laundering and know-your-customer requirements to platforms that do not hold or control user assets. Future developments will likely involve new regulatory interpretations or legislative proposals that specifically address the unique operational models and risks associated with non-custodial services.
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