Investing & Digital AssetsInvesting & Digital Assets GlossaryPart 12 of 13
The Rules Glossary
41 terms from the Investing & Digital Assets book's The Rules part, each defined in a line and linked to the chapter that explains it.
- Accredited investor (Singapore, crypto): a customer outside most of MAS's retail crypto restrictions, tested on net personal assets, net financial assets or income, with digital payment tokens counted after at least a 50% haircut and capped at S$200,000 (Beyond the US).
- Airdrop (tax): new units received without payment, ordinary income at fair market value when the holder gains dominion and control, with that value as basis (Rev. Rul. 2019-24) (Crypto Tax).
- Anonymizing services provider: in FinCEN's 2019 guidance, a mixer that accepts and retransmits value and is therefore a money transmitter, unlike a supplier of anonymizing software (Licensing a Crypto Business).
- Attribution label: a name or category attached to an address or cluster, with its source, date and confidence (On-Chain Analytics & Investigations).
- BitLicense: New York's license for virtual currency business activity with New York or New Yorkers under 23 NYCRR Part 200; a New York limited purpose trust charter is the alternative (Licensing a Crypto Business).
- CASP (crypto-asset service provider): a firm authorized under MiCA to provide one or more of the ten crypto-asset services in the EU, passportable across the EEA (Licensing a Crypto Business).
- Change address: the output of a UTXO transaction that returns the unspent remainder to the sender, which analytics tries to identify to grow the sender's cluster (On-Chain Analytics & Investigations).
- CLARITY Act: the House-passed 2025 market structure bill that would have given the CFTC supervision of digital commodity spot markets; stalled after a failed Senate cloture vote on September 15, 2026 (Securities, Commodities & Crypto Market Structure).
- Clustering: grouping addresses one party controls, by heuristics such as common-input ownership and change detection (On-Chain Analytics & Investigations).
- CoinJoin: a transaction combining many users' inputs into equal-value outputs, built to break common-input clustering (On-Chain Analytics & Investigations).
- Common-input ownership: the heuristic that addresses spent together as inputs to one transaction are controlled by one party (On-Chain Analytics & Investigations).
- DFAL (Digital Financial Assets Law): California's Digital Financial Assets Law, requiring a DFPI license for digital financial asset business with California residents from July 1, 2026 (Licensing a Crypto Business).
- Digital commodity: in the SEC's 2026 taxonomy, a crypto asset whose value comes from the programmatic operation of a functional crypto system and that is not itself a security (Securities, Commodities & Crypto Market Structure).
- Digital security: in the SEC's 2026 taxonomy, a tokenized financial instrument, a security whether on chain or off (Securities, Commodities & Crypto Market Structure).
- Disposal (crypto tax): giving up units for dollars, goods, services or another digital asset, including a swap or a fee paid in crypto, which realizes gain or loss (Crypto Tax).
- Dominion and control: the point at which a taxpayer can sell, transfer or otherwise dispose of received units, which sets the time and value of staking and airdrop income (Crypto Tax).
- Exposure (direct, indirect): the share of a transfer's value that comes from, or traces back within some number of hops to, a labeled category of counterparty (On-Chain Analytics & Investigations).
- Hosted wallet provider: in FinCEN's 2019 guidance, an account-based money transmitter that receives, stores and transmits crypto for accountholders (Licensing a Crypto Business).
- Howey test: the Supreme Court's 1946 definition of an investment contract: an investment of money in a common enterprise with an expectation of profits from the efforts of others (Securities, Commodities & Crypto Market Structure).
- Income event: a receipt of units as income (staking reward, airdrop, mining, lending interest) recorded with its time and value, which opens a tax lot at that value (Crypto Tax).
- Investment contract separation: in the SEC's 2026 interpretation, the point at which a non-security crypto asset stops being subject to an investment contract, by fulfillment or public abandonment of the issuer's promised efforts (Securities, Commodities & Crypto Market Structure).
- IVMS101: the interVASP Messaging Standard data model for originator and beneficiary information carried by Travel Rule protocols (AML & the Travel Rule for Crypto).
- Jarrett v. United States: the Tezos staking refund suit the Sixth Circuit dismissed as moot in August 2023 after the IRS paid the refund, leaving the taxation of created tokens undecided (Crypto Tax).
- KYT (know your transaction): screening a crypto transfer's source or destination for exposure to risky categories, before withdrawals, on deposits and again as labels change (On-Chain Analytics & Investigations).
- MiCA passport: a CASP's notification to its home authority to serve another member state, effective from the authority's confirmation or the 15th calendar day after notifying (Licensing a Crypto Business).
- Money Transmission Modernization Act (MTMA): CSBS's model law setting one standard for state money transmitter net worth, bonds and permissible investments, enacted in full or part by 31 states (Licensing a Crypto Business).
- Notice 2014-21: the IRS notice treating virtual currency as property, with income at fair market value on receipt and gain or loss on exchange (Crypto Tax).
- One-time change address: an output appearing on chain for the first time, the only such output in a transaction without self-change, which the change heuristic attributes to the sender (On-Chain Analytics & Investigations).
- PFOF ban (EU): MiFIR Article 39a's prohibition on investment firms receiving payment for routing retail orders, with national exemptions ended June 30, 2026 (Beyond the US).
- Programmatic sales: in SEC v. Ripple, the issuer's blind bid/ask sales on exchanges, held not to be investment contract offers (Securities, Commodities & Crypto Market Structure).
- Regulation Crypto Assets: the SEC's August 2026 proposal of startup and fundraising exemptions and a safe harbor for investment contracts involving crypto assets (Securities, Commodities & Crypto Market Structure).
- Retail commodity transaction: a leveraged, margined or financed commodity transaction with a non-eligible contract participant, treated as a futures contract unless actual delivery occurs within 28 days (Securities, Commodities & Crypto Market Structure).
- Rev. Rul. 2023-14: the IRS ruling that staking rewards are income at fair market value when the taxpayer gains dominion and control, including staking through an exchange (Crypto Tax).
- Sunrise problem: the gap when a counterparty VASP sits in a jurisdiction that hasn't implemented the Travel Rule and can't send or receive compliant messages (AML & the Travel Rule for Crypto).
- Travel Address: in TRP, a base58check-encoded URL with a "ta" prefix that tells the originating VASP where to send a transfer inquiry (AML & the Travel Rule for Crypto).
- Travel Rule (crypto): FinCEN's funds transfer rule applied to crypto transmittals of $3,000 or more, met by sending originator and beneficiary data to the counterparty VASP out of band (AML & the Travel Rule for Crypto).
- TRISA: an open-source Travel Rule protocol using gRPC, a certificate-issuing directory and mutual TLS (AML & the Travel Rule for Crypto).
- TRP (Travel Rule Protocol): the OpenVASP Association's open protocol of inquiry, resolution and confirmation calls between VASPs over mutual TLS (AML & the Travel Rule for Crypto).
- Unhosted wallet: a self-custody wallet with no institution behind it; a transfer to one has no counterparty to receive Travel Rule data (AML & the Travel Rule for Crypto).
- VARA: Dubai's Virtual Assets Regulatory Authority, which licenses virtual asset activities by category (Beyond the US).
- VASP (virtual asset service provider): FATF's term for a business that exchanges, transfers or safekeeps virtual assets for others, the counterparty a Travel Rule message goes to (AML & the Travel Rule for Crypto).