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VASP Supervision

Definition ∞ VASP supervision refers to the oversight and regulatory monitoring of Virtual Asset Service Providers by governmental authorities. This supervision ensures that VASPs, such as cryptocurrency exchanges, custodians, and certain wallet providers, comply with anti-money laundering, counter-terrorist financing, and other financial regulations. Authorities aim to mitigate risks associated with illicit financial activities and protect consumers within the digital asset sector. The scope and intensity of supervision vary by jurisdiction.
Context ∞ VASP supervision is a growing focus in global financial regulatory news, driven by international standards set by bodies like the Financial Action Task Force. Discussions often address the challenges of implementing effective oversight in a rapidly evolving and decentralized industry. The increasing emphasis on VASP supervision reflects a global effort to bring digital asset markets into alignment with traditional financial compliance frameworks.

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NYDFS Fines Paxos $26.5 Million for Systemic AML Compliance Failures

This high-value enforcement action establishes a clear, non-negotiable standard for virtual currency entity due diligence and systemic AML control robustness.