What Is the Concept of ‘Regulatory Arbitrage’ in the Crypto Space?

Regulatory arbitrage is the practice of exploiting differences in regulations between jurisdictions to gain a competitive advantage or reduce costs. In crypto, this often involves setting up operations or exchanges in countries with favorable or lax regulatory environments.

Arbitrageurs may move funds or execute trades in jurisdictions that offer lower taxes or less stringent compliance requirements. This practice is controversial but common.