Definition ∞ Trading platform licensing involves obtaining official permits or authorizations from regulatory bodies to operate a digital asset exchange or trading venue within a specific jurisdiction. This process ensures that platforms adhere to legal requirements concerning market conduct, consumer protection, capital adequacy, and operational integrity. Licenses often stipulate compliance with anti-money laundering and know-your-customer regulations. It is a prerequisite for legal operation in many regions.
Context ∞ News frequently covers developments in trading platform licensing, including new regulations, license approvals, or enforcement actions against unlicensed operators. Obtaining a license often signals a platform’s commitment to regulatory compliance, potentially increasing its credibility and attracting institutional clients. Conversely, operating without proper licensing can lead to significant legal repercussions and reduced market access, influencing the competitive landscape of digital asset trading.
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