Who Regulates What?

The answer varies by jurisdiction. Typically, securities regulators handle investment products and disclosures, banking/payment regulators oversee money services and fiat rails, and commodities or derivatives regulators cover futures/options. Crypto often touches all three.

KYC/AML & Sanctions

Most compliant platforms run KYC (Know-Your-Customer) checks and AML monitoring to detect illicit finance. Expect identity verification, source-of-funds questions for larger amounts, and screening against sanctions lists.

• Transfers may be delayed or rejected if names or addresses hit sanctions screens.
• On-chain analytics are increasingly used to risk-score wallet flows.

Custody & Segregation of Funds

If a platform custodies assets for you, check segregation (client assets separated from company funds), audit/regulatory status, and what happens in insolvency. For self-custody, you are responsible for keys, but you remove counterparty risk.

How Tokens Get Classified

Tokens can be treated as securities, commodities, payment tokens, or utility tokens depending on facts and local law. Classification affects who can list, how it can be promoted, and disclosure obligations.

• Stablecoins: Scrutinized for reserves, redemption rights, and disclosures.
• Staking/lending products: May trigger securities or banking rules if returns are pooled/promised.
• NFTs/collectibles: Typically not securities unless structured as investments with profit expectations.

Tax Basics

In many countries, selling, swapping, or spending tokens is a taxable event (capital gains). Staking or interest income may be ordinary income. Keep detailed records—cost basis, dates, and proceeds—and consult a qualified tax professional.

Disclosures & Consumer Protections

• Risk statements: Volatility, loss of principal, counterparty risk, technical risk.
• Reserve attestations: For stablecoins or yield products—frequency and scope matter.
• Incident reporting: Hacks, outages, or freezes should be disclosed promptly and clearly.
• Complaints & recourse: Where consumers can file, response times, and dispute pathways.

Practical Checklist (Non-Advice)

• Confirm the platform’s registration/licensing in your country.
• Read terms of service for custody, rehypothecation, and wind-down rules.
• Verify KYC/AML requirements and any geographic restrictions.
• Understand tax reporting obligations; export statements regularly.
• Prefer assets with transparent disclosures and independent attestations/audits.
• Size positions so a venue or rule change doesn’t strand critical funds.

Reminder: laws change. Re-check policies before large transfers or new products.