Airdrop
A distribution of tokens to wallet addresses without payment, often used in marketing. Tax authorities generally treat airdrops as income at receipt; securities regulators examine whether distribution schemes are disguised offerings.
AML/CFT
Anti-money-laundering and countering the financing of terrorism: the compliance layer (customer identification, monitoring, suspicious activity reporting) that applies to crypto businesses in nearly every jurisdiction, usually before any prudential framework does.
ART (asset-referenced token)
MiCA's category for tokens that stabilize value by referencing a basket of assets, currencies, or crypto. ART issuers face MiCA's heaviest requirements, including authorization, reserves, and volume caps for use as a means of exchange.
BitLicense
New York's virtual currency license under 23 NYCRR Part 200, in force since 2015. The first US state framework built specifically for crypto, and the model for California's DFAL and Illinois's 2025 law.
CARF
The OECD's Crypto-Asset Reporting Framework: a global standard for automatic exchange of tax information on crypto transactions. The EU implemented it through DAC8; dozens of jurisdictions have committed to exchanges beginning in 2027 and 2028.
CASP (crypto-asset service provider)
MiCA's licensed category covering exchange, custody, execution, advice, portfolio management, and transfer services for crypto-assets in the EU.
CBDC (central bank digital currency)
A digital liability of a central bank. Live at scale in few places, piloted in many; the US House passed a bill in July 2025 to bar the Federal Reserve from issuing a retail CBDC.
CLARITY Act
The Digital Asset Market Clarity Act (H.R. 3633): the US market structure bill dividing jurisdiction between the SEC and CFTC and creating a registration regime for digital commodity intermediaries. House-passed July 2025; awaiting Senate floor action.
Custody
Holding crypto assets on behalf of customers. A regulatory focus since FTX: modern frameworks require segregation of customer assets, bankruptcy protections, and in some regimes qualified or independent custodians.
DAO (decentralized autonomous organization)
An entity governed by token-holder voting and smart contracts. Wyoming pioneered legal recognition (2021 DAO LLC law, 2024 DUNA statute); most jurisdictions still fit DAOs awkwardly into partnership or company law.
DAC8
Directive (EU) 2023/2226, extending EU tax cooperation rules to crypto. Reporting crypto-asset service providers must collect and report user and transaction data from January 1, 2026.
DeFi (decentralized finance)
Financial services delivered through smart contracts without a central intermediary. The hardest perimeter question in the field: the Senate's 2026 CLARITY text includes the first US statutory framework for DeFi trading protocols.
DFAL
California's Digital Financial Assets Law (AB 39/SB 401, 2023, as amended): a BitLicense-style licensing regime administered by the DFPI, operative July 1, 2026.
Digital commodity
The CLARITY Act's proposed category (and the SEC-CFTC guidance category) for crypto assets that are not securities: primarily CFTC-supervised in spot markets. The March 2026 joint release named 16 assets as digital commodities.
Digital security
A crypto asset that is a security under applicable law, for instance a token sold as an investment contract. SEC-supervised in the US; equivalents exist in most securities regimes.
DLT (distributed ledger technology)
The database architecture underlying blockchains. Switzerland's 2021 'DLT Act' and the EU's DLT Pilot Regime regulate market infrastructure built on it.
DORA
The EU's Digital Operational Resilience Act, applying since January 17, 2025. Imposes ICT risk management and incident reporting on financial entities including MiCA-licensed CASPs and issuers.
DTSP
Digital token service provider: Singapore's category under the FSM Act 2022 for firms serving customers outside Singapore, licensable since June 30, 2025.
E-money token (EMT)
MiCA's category for stablecoins referencing a single official currency. Issuers must be credit institutions or e-money institutions; USDC and EURC are authorized examples, while USDT is not.
ETF / ETP
Exchange-traded funds and products holding crypto. US spot bitcoin ETFs launched January 2024 and ether ETFs July 2024, moving substantial exposure into securities-regulated wrappers.
FATF
The Financial Action Task Force, whose Recommendation 15 and travel rule set the global AML baseline for virtual assets. FATF mutual evaluations now grade countries on crypto supervision effectiveness.
FIT21
The Financial Innovation and Technology for the 21st Century Act, the 2024 House-passed predecessor to the CLARITY Act. Never received a Senate vote.
GENIUS Act
The Guiding and Establishing National Innovation for US Stablecoins Act, signed July 18, 2025: the first US federal crypto statute, licensing payment stablecoin issuers with 1:1 reserve, disclosure, and redemption requirements.
Grandfathering / transition period
A window allowing firms operating under prior rules to continue while seeking authorization under a new regime. MiCA's closed July 1, 2026; the UK's runs through application review after October 2027.
Howey test
The US Supreme Court's investment contract test (SEC v. W.J. Howey Co., 1946): an investment of money in a common enterprise with an expectation of profits from the efforts of others. Still the gateway question for whether a token sale is a securities offering.
Innovation exemption
A rulemaking the SEC signaled in 2025–2026 to allow limited trading of tokenized securities on novel platforms while permanent rules are written.
KYC (know your customer)
Customer identification and verification obligations, the operational core of AML compliance for exchanges, brokers, and increasingly wallet providers.
Market abuse (crypto)
Manipulation, insider dealing, and unlawful disclosure applied to crypto markets. MiCA Title VI created the first cross-border crypto market abuse regime; the UK's MARC rules follow in 2027; Korea's VAUPA carries the world's harshest sentences.
MiCA
The EU's Markets in Crypto-Assets Regulation ((EU) 2023/1114): the first comprehensive crypto framework in a major economy, covering issuance, stablecoins, service providers, and market abuse across 27 member states.
Mining
Proof-of-work block production. Legal and increasingly courted in the US (several states passed 'right to mine' laws); licensed and export-oriented in Russia since November 2024; banned in China since 2021.
Money transmission
The US state licensing category that covered most crypto exchange activity before bespoke regimes. Coverage varies: some states include virtual currency by statute, others by interpretation, a few exempt it.
NFT (non-fungible token)
A unique token typically representing media or membership. Most frameworks, including MiCA, largely exclude true NFTs, while regulators warn that fractionalized or serial issuance can re-enter securities territory.
Passporting
The right to serve an entire market on one license. MiCA gives CASPs EU-wide passporting; its absence elsewhere is why firms hold dozens of state and national licenses.
Payment stablecoin
The GENIUS Act's category: a digital asset designed to maintain a stable value against a fixed monetary amount and used for payment or settlement. Only approved issuers may issue one in the US once the Act is effective.
PMLA
India's Prevention of Money Laundering Act, extended to virtual digital asset businesses in March 2023, requiring FIU-IND registration; the closest thing India has to a crypto licensing regime.
Proof of reserves
Attestations that a custodian or issuer holds assets backing customer balances. Required in various forms by the GENIUS Act (monthly reserve disclosure), MiCA, and Hong Kong's stablecoin regime.
Regulatory perimeter
The boundary between regulated and unregulated activity. The central design question of every crypto framework: the UK spent 2025–2026 consulting on exactly which activities sit inside it.
Restricted dealer
Canada's interim registration category letting crypto trading platforms operate under undertakings while full registration is processed.
Sandbox
A supervised environment for testing products under relaxed rules. Saudi Arabia, Colombia, and Israel have channelled most permitted crypto activity through sandboxes rather than full frameworks.
SPDI
Wyoming's Special Purpose Depository Institution: a state bank charter built for digital asset custody, created in 2019 and the template for crypto-native banking arguments since.
Stablecoin
A crypto asset engineered to hold a stable value, usually against a fiat currency. The most-regulated corner of the field: dedicated regimes are now law in the US, EU, Hong Kong, Singapore, Japan, and the UAE, with the UK's arriving in 2027.
Staking
Locking tokens to help secure a proof-of-stake network in exchange for rewards. Treated variously as a service (SEC settlements 2023), a regulated activity (UK consultation), or a permitted exchange function (MiCA, with conditions).
Strategic Bitcoin Reserve
The US policy, established by executive order in March 2025, of retaining forfeited bitcoin as a national reserve; several states (Texas, New Hampshire, Arizona) passed their own reserve or crypto-holdings laws in 2025.
TDS (tax deducted at source)
India's 1% withholding on virtual digital asset transfers under § 194S, a major drag on domestic exchange volumes since July 2022.
TFR / travel rule
The FATF requirement, implemented in the EU by Regulation (EU) 2023/1113, that originator and beneficiary information accompany crypto transfers, applying in the EU since December 30, 2024.
Tokenization / RWA
Issuing blockchain tokens representing real-world assets such as funds, bonds, or deposits. The 2026 growth front: Hong Kong pilots secondary trading of tokenized funds; the SEC is drafting tokenized-securities exemptions.
Travel rule threshold
The transfer value above which full originator/beneficiary data is mandatory. FATF suggests USD/EUR 1,000; the EU applies the rule from the first euro for CASP-to-CASP transfers.
Unhosted / self-custody wallet
A wallet controlled by the user rather than a service provider. Point of political contention: the CLARITY Act includes statutory protection for self-custody; the EU imposes verification duties on transfers involving unhosted wallets above thresholds.
VASP (virtual asset service provider)
FATF's umbrella term for exchanges, custodians, and transfer services, adopted in national law from Brazil to Kenya.
VATP
Virtual asset trading platform: Hong Kong's licensed exchange category under the AMLO regime, mandatory since June 2023.
VAUPA
South Korea's Virtual Asset User Protection Act, in force July 19, 2024: custody, reserve, insurance, and market abuse rules, with the harshest criminal penalties in any crypto statute.
White paper (MiCA)
The mandatory disclosure document for offering crypto-assets to the EU public, filed with a national authority; misleading statements attract liability.
Wildcat era
Shorthand, borrowed from 19th-century US banking, for the pre-framework years in which stablecoins and exchanges operated without dedicated supervision. Regulators from the BIS to the Fed have used the analogy to argue for issuer licensing.