Voluntary Self-Disclosure

Definition ∞ Voluntary self-disclosure is the act of an individual or entity reporting their own past misconduct or violations to a regulatory authority. In the digital asset sector, this typically involves a company or individual admitting to non-compliance with securities laws, AML regulations, or other legal requirements before an enforcement action is initiated. Such disclosures can potentially result in reduced penalties or more favorable settlement terms. It signals cooperation and a commitment to rectification.
Context ∞ News often reports on instances of voluntary self-disclosure by crypto firms facing regulatory scrutiny, particularly concerning unregistered securities offerings or compliance lapses. Regulatory bodies, such as the SEC or DOJ, often provide incentives for such cooperation. The effectiveness of self-disclosure programs is a recurring discussion point in the evolving landscape of digital asset regulation and enforcement.