What compliance requirements do crypto exchanges need to meet?

Crypto exchanges must comply with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations in their operating jurisdictions. This requires verifying user identities, monitoring transactions for suspicious activity, and reporting large transfers to authorities. Exchanges also need licenses or registrations where required—for example, the US requires Money Transmitter licenses, while the EU enforces the Markets in Crypto Assets Regulation (MiCA). They must implement robust security measures to protect customer funds, maintain transparent financial records, and comply with tax reporting obligations. Specific requirements vary significantly by country; some nations have strict frameworks while others have minimal oversight. Failure to comply can result in hefty fines, operational shutdowns, or criminal prosecution of executives.