Exchange compliance refers to the adherence of cryptocurrency exchanges to legal and regulatory requirements. This involves following laws related to Anti-Money Laundering (AML), Know Your Customer (KYC), and other relevant financial regulations. Exchanges must implement procedures to verify the identity of their users, ensuring that they are not facilitating illicit activities. Regular audits and reporting to regulatory bodies are also part of this process to maintain transparency and integrity.Failure to comply can lead to fines, legal action, or even the shutdown of an exchange. Thus, establishing robust compliance measures protects both users and the exchange itself, fostering trust in the platform. Ultimately, exchange compliance is about ensuring that cryptocurrency platforms operate lawfully and responsibly, aligning with broader financial regulations to promote a secure trading environment.