Compliance Frameworks

The EU's comprehensive regulatory framework for crypto-assets, covering CASPs, stablecoins (ARTs/EMTs), and market abuse. Requires authorization, capital requirements, and white paper disclosures. Enables EU-wide passporting.

Requires VASPs to obtain, hold, and transmit originator and beneficiary information during virtual asset transfers. Thresholds vary by jurisdiction ($1,000 USD in most, $3,000 in the US, EUR 0 under MiCA).

The Financial Action Task Force's guidance on applying AML/CFT standards to virtual assets and VASPs. Forms the basis for most national crypto regulations worldwide. Updated in 2021 to cover DeFi, stablecoins, and NFTs.

Countries worldwide are implementing registration and licensing regimes for virtual asset service providers (VASPs) and crypto-asset service providers (CASPs). Requirements vary significantly by jurisdiction but generally mandate registration with a national authority, fit-and-proper assessments for management, and minimum capital thresholds. Ongoing compliance obligations include periodic reporting, governance standards, and maintaining adequate operational resources.

Anti-money laundering and counter-terrorism financing (AML/CFT) requirements form the backbone of crypto regulatory compliance worldwide. Crypto businesses must implement comprehensive AML programs including customer due diligence, transaction monitoring, and suspicious activity reporting. Most jurisdictions require a designated compliance officer, independent audits, and record retention of at least five years.

Custody regulations govern how firms safeguard client crypto assets, addressing key management, asset segregation, and operational resilience. Regulators increasingly require custodians to segregate client assets from proprietary holdings, maintain insurance or bonding, and implement robust disaster recovery plans. Qualified custodian requirements and regular independent audits are becoming standard across jurisdictions.

Determining whether a token qualifies as a security is a critical compliance question for any crypto project. In the US, the Howey Test evaluates whether an asset constitutes an investment contract; the EU applies MiFID II financial instrument definitions; and other jurisdictions have similar analytical frameworks. Tokens classified as securities must comply with registration or exemption requirements, prospectus disclosures, and secondary trading restrictions.

Stablecoin-specific regulation is rapidly emerging, with the EU's MiCA framework establishing rules for asset-referenced tokens (ARTs) and e-money tokens (EMTs), and the US advancing proposed legislation for payment stablecoins. Core requirements center on full reserve backing (1:1), redemption rights for holders, and regular reserve audits by independent parties. Issuers must obtain specific licenses, meet capital requirements, and provide transparent disclosures about reserve composition and risk.