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Crypto Exchange Listing: Types of Exchanges and Compliance Requirements

The crypto industry continues to evolve, fueled by the increasing institutional adoption of crypto. Today, numerous companies are entering the crypto space, launching their own projects and tokens. This trend makes logical sense, as conducting Initial Coin Offerings (ICOs) provides a convenient way for fundraising and attracting early investors to support your project.

One of the main stages that shape the trajectory of a digital asset is its listing. The process of token listing on exchange involves meeting specific criteria and adhering to guidelines set by different types of exchanges. In this article, we’ll explore the various types of exchanges and the requirements for successful listing.

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Types of Platforms for Token Listing

Of course, the best case is when your token is listed on the largest centralized exchanges, however, it takes a lot of time and effort. So many projects tend to first list on decentralized exchanges (DEX) and over time, apply for centralized (CEX). Here’s the difference:

  • CEX. Operate under the control of a central authority or intermediary. Token listing on CEXs typically involves a centralized decision-making process. The exchange management assesses and approves projects based on criteria such as documentation, legal compliance, AML, KYC, and community support.
  • DEX. Operate on decentralized networks, utilizing smart contracts to enable peer-to-peer trading. Token listing on DEXs is often more open. Projects can be listed by creating smart contracts that interact with the exchange protocol. Listing decisions may be influenced by community governance rather than centralized authority. Usually, DEXs don’t require user verification and compliance with AML.

Compliance in Crypto Listing

To prevent money laundering, centralized exchanges must comply with regulations. This includes implementing KYC (know-your-customer) procedures, AML (anti-money laundering) checks, identity verification, and customer authentication.

KYC is a crucial process for identifying and verifying new customers during registration. Fiat-to-crypto exchanges, dealing with traditional currencies, are implementing KYC to align with standards required by traditional financial institutions like banks. This practice contributes to a transparent and regulated environment, impacting various aspects, including the coin listing on exchange.

AML compliance is crucial for CEX before listing new tokens to reduce the risk of illicit financial activities. By adhering to AML standards, exchanges aim to establish a secure and regulated environment, ensuring that listed tokens and transactions meet legal and regulatory requirements.

Choosing a regulated exchange for token listing is a smart decision, as it ensures the implementation of AML and KYC protocols. So after listing on DEX, plan listing your token on one of the top 10 CEX platforms, that would provide a secure and compliant environment for your token.

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