Obliged Entities
Web3 / compliance
Obliged entities are businesses and organizations legally required to comply with anti-money laundering and counter-terrorism financing (AML/CFT) regulations. In the cryptocurrency sector, obliged entities include centralized exchanges, custodians, wallet providers, decentralized finance platforms with centralized components, and other crypto service providers handling customer assets or transactions. These entities must implement due diligence procedures such as customer identification, beneficial ownership verification, and ongoing transaction monitoring. The specific obligations vary by jurisdiction but generally require maintaining detailed records, reporting suspicious activities to authorities, and conducting risk assessments on their customer bases and operations. Example: Kraken, a major cryptocurrency exchange, is an obliged entity under EU regulations and maintains extensive AML/CFT compliance programs including customer due diligence, transaction monitoring, and regular reporting to financial intelligence units. Why it matters for compliance: Identifying obliged entities clarifies regulatory responsibility in crypto ecosystems. This designation determines which organizations must invest in compliance infrastructure, directly affecting which platforms can legally operate in regulated jurisdictions.
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