Jurisdictional arbitrage
Jurisdictional arbitrage is the practice of choosing favorable legal or regulatory environments for operating crypto businesses or protocols.
Teams select domiciles, user markets, or operational footprints based on licensing, tax, enforcement posture, and clarity. Users may access services from jurisdictions with permissive rules.
"Projects launch in countries with clearer crypto frameworks to reduce legal uncertainty."
"Decentralized protocols distribute governance and infrastructure to mitigate single-jurisdiction risk."
Benefits include innovation and competition; risks include regulatory backlash, fragmentation, and access limitations for users in stricter regions.
"Geo-fencing and KYC requirements vary widely, impacting user reach and compliance overhead."
"Cross-border enforcement actions can still apply when services target restricted markets."
Related Terms
Anti-Money Laundering
→Laws and processes that aim to prevent illicit funds from being disguised as legitimate.
Cryptocurrency Exchange
→A platform that facilitates the buying, selling, and trading of cryptocurrencies. Exchanges can support crypto-to-crypto or crypto-to-fiat transactions and serve as crucial infrastructure in the digital asset ecosystem.
Decentralized Exchange
→A decentralized exchange (DEX) is a platform that allows users to trade digital assets directly with each other, without the need for an intermediary, such as a brokerage or bank.
Decentralization
→The distribution of power and control across many participants, reducing single points of failure or authority.
All terms and definitions may update as the Cryptionary improves.
