Platform Exemption

Definition ∞ Platform exemption means a specific digital platform is not required to follow certain rules or regulations that typically apply to others. This regulatory provision allows certain platforms, often those deemed to have limited systemic risk or specific operational models, to operate without needing full compliance with broader licensing or conduct requirements. The criteria for such exemptions are usually strict and designed to balance innovation with investor protection. It provides flexibility for nascent industries or specialized service providers.
Context ∞ Platform exemptions are a frequent topic in regulatory discussions concerning decentralized finance (DeFi) and peer-to-peer digital asset services. Regulators are evaluating whether certain decentralized protocols or non-custodial platforms warrant different treatment than centralized exchanges. The debate centers on defining the boundaries of these exemptions to avoid regulatory gaps while fostering technological advancement.