Definition ∞ Virtual Currency Service refers to any business activity involving the exchange, transfer, or safekeeping of virtual assets on behalf of others. This includes operations conducted by cryptocurrency exchanges, wallet providers, and other entities facilitating digital asset transactions. These services are typically subject to regulatory oversight aimed at preventing money laundering, terrorist financing, and consumer fraud. The classification of such services dictates the compliance obligations they must fulfill.
Context ∞ The key discussion surrounding virtual currency services involves the evolving regulatory landscape that seeks to define and govern these operations more clearly. Its situation highlights a global effort to bring these services under a consistent legal and compliance framework, similar to traditional financial services. A critical future development involves the harmonization of international definitions and regulatory requirements for virtual currency services, ensuring a level playing field and reducing opportunities for regulatory arbitrage.
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