Definition ∞ Proportionate Compliance describes a regulatory approach where the extent and intensity of compliance requirements are tailored to the specific risks and characteristics of a regulated entity or activity. In the digital asset sector, this means regulations are applied in a manner commensurate with the scale, complexity, and potential impact of a crypto business. It seeks to avoid overly burdensome rules for smaller entities while ensuring adequate oversight for larger, higher-risk operations. This approach aims for balanced regulation.
Context ∞ Proportionate Compliance is a frequently discussed concept in regulatory news regarding digital assets, as authorities worldwide grapple with how to effectively oversee the rapidly evolving industry. Advocates argue it can foster innovation by not stifling smaller projects with excessive demands. Debates often center on how to accurately assess risk and apply appropriate regulatory measures without creating loopholes or undue burdens.
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