Definition ∞ Regulatory scope denotes the extent of authority a governing body possesses over particular activities, entities, or assets within its jurisdiction. This concept specifies which aspects of an operation fall under the purview of specific laws and regulations. In the digital asset sphere, regulatory scope determines which crypto products, services, or participants are subject to oversight by financial authorities, anti-money laundering statutes, or securities commissions. Understanding this delineation is critical for compliance and risk management.
Context ∞ The regulatory scope for digital assets remains a subject of considerable debate and evolution across global jurisdictions. A primary challenge involves classifying various crypto assets, such as distinguishing utility tokens from securities, which directly impacts which regulatory frameworks apply. A key discussion point involves expanding the scope to cover decentralized finance (DeFi) protocols, stablecoins, and non-fungible tokens (NFTs), as authorities seek to address perceived gaps in existing oversight. Future developments will likely involve clearer definitions and potentially broader regulatory application to mitigate systemic risks and protect consumers.
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