How Does the Regulatory Environment Differ for Custodial CEXs versus Non-Custodial RFQ Platforms?
Custodial CEXs often face stricter regulation, particularly concerning anti-money laundering, know-your-customer rules, and asset security standards, as they hold client funds. Non-custodial RFQ platforms, which merely facilitate matching, may have lighter regulatory burdens.
However, they are still subject to rules regarding fair dealing and market abuse, especially if they are deemed "Organized Trading Facilities."
Glossar
Cexs
Architecture ⎊ Cexs, within the cryptocurrency derivatives landscape, represent centralized exchange functionalities extended to encompass options and perpetual swap contract trading, functioning as intermediaries for order matching and contract fulfillment.
Rfq Platforms
Execution ⎊ Rfq platforms, within cryptocurrency derivatives and options trading, facilitate block trades and customized contract specifications outside of centralized exchange order books, offering direct negotiation between counterparties.
Regulatory Environment
Jurisdiction ⎊ Regulatory environment for cryptocurrency, options trading, and financial derivatives is fundamentally defined by jurisdictional fragmentation, creating complexities in cross-border transactions and enforcement.