Crypto Exchange Listing Regulations: Main Requirements

Today, the crypto industry is awakening after a long “sleeping” in the bear trend that started in 2022. We can see numerous new crypto projects and startups emerging – GameFi projects, DeFi platforms, NFT marketplaces, etc. Each category brings its unique features and innovations to the crypto space. However, forming a professional team and launching a new project is “only half the battle.” What determines a project’s success and adoption is its liquidity, visibility, and broad investor base, and this is only possible after you list token on a crypto exchange.

An important aspect of crypto listing is legal compliance. Without it, it will be hard to receive a positive answer from top-tier crypto platforms and attract large investors to your project. So, in this article, we will discuss legal compliance in coin listings.

Global Crypto Exchange Regulations

Crypto regulations vary depending on the country and they are constantly changed and modified. Here are some examples of crypto exchange regulatory bodies:

In the USA: the SEC (Securities and Exchange Commission), CFTC (Commodity Futures Trading Commission), and FinCEN (Financial Crimes Enforcement Network).
In the EU: the Markets in Crypto-Assets (MiCA) measures.
In the United Kingdom: the Financial Conduct Authority (FCA).
Australia: the Australian Securities and Investments Commission (ASIC) and AUSTRAC (Australian Transaction Reports and Analysis Centre).

Compliance Requirements

The requirements for a token listing on exchanges may vary, but they generally imply these aspects:

KYC and AML in crypto exchange listings are key procedures that help collect and verify user identification details to prevent illegal activities.
Regulatory classification – exchanges need to clarify whether their tokens are classified as securities or utility tokens, as this distinction can impact regulatory compliance.
Legal opinions – some exchanges request legal opinions from reputable law firms to verify the compliance of the token with laws and regulations in the territory in which it operates.
Smart contract audits – exchanges may require projects to undergo smart contract audits to ensure the integrity and security of the token’s underlying code.
Due diligence – projects need to provide comprehensive due diligence documentation, including details about the team, project roadmap, use of funds, and other relevant information.

Companies often hire legal advisors for coin listings to ensure successful token listing on reputable exchanges. They make sure the project adheres to legal requirements, assist in negotiations between a crypto exchange and a project, and provide ongoing support to ensure that the project remains in compliance with evolving regulatory standards after listing.

By adhering to regulatory standards, projects not only increase their credibility in the eyes of potential investors but also open doors to a broader audience and increase liquidity. It contributes to the long-term success and sustainability of the project.