# 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](https://www.syntaqx.com/books/investing-and-digital-assets/beyond-the-us#singapore)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-tax#airdrops-and-forks)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-licensing#fincen-who-is-a-money-services-business)).
- **Attribution label:** a name or category attached to an address or cluster, with its source, date and confidence ([On-Chain Analytics & Investigations](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#attribution)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-licensing#new-york-the-bitlicense)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-licensing#the-eu-mica-casp-authorization)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#change-addresses)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#congress-the-clarity-act)).
- **Clustering:** grouping addresses one party controls, by heuristics such as common-input ownership and change detection ([On-Chain Analytics & Investigations](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#clustering)).
- **CoinJoin:** a transaction combining many users' inputs into equal-value outputs, built to break common-input clustering ([On-Chain Analytics & Investigations](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#worked-example-a-small-graph)).
- **Common-input ownership:** the heuristic that addresses spent together as inputs to one transaction are controlled by one party ([On-Chain Analytics & Investigations](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#common-input-ownership)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-licensing#california-the-dfal)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#the-2026-taxonomy)).
- **Digital security:** in the SEC's 2026 taxonomy, a tokenized financial instrument, a security whether on chain or off ([Securities, Commodities & Crypto Market Structure](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#the-2026-taxonomy)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-tax#disposals)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-tax#income-at-receipt)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#exposure-and-risk-scores)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-licensing#fincen-who-is-a-money-services-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](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#the-test)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-tax#how-to-build-it)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#the-2026-taxonomy)).
- **IVMS101:** the interVASP Messaging Standard data model for originator and beneficiary information carried by Travel Rule protocols ([AML & the Travel Rule for Crypto](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#how-the-platforms-do-it)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-tax#jarrett)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#kyt-on-deposits-and-withdrawals)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-licensing#the-eu-mica-casp-authorization)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-licensing#state-money-transmission-and-the-mtma)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-tax#property-not-currency)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/blockchain-analytics#change-addresses)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/beyond-the-us#mifid-ii-for-brokers)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#ripple-2020-to-2025)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#regulation-crypto-assets-proposed)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/securities-or-commodities#the-cftc-and-the-spot-market)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-tax#staking)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#counterparty-vasps)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#worked-example-a-5-000-withdrawal-two-destinations)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#the-rule)).
- **TRISA:** an open-source Travel Rule protocol using gRPC, a certificate-issuing directory and mutual TLS ([AML & the Travel Rule for Crypto](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#how-the-platforms-do-it)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#how-the-platforms-do-it)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#worked-example-a-5-000-withdrawal-two-destinations)).
- **VARA:** Dubai's Virtual Assets Regulatory Authority, which licenses virtual asset activities by category ([Beyond the US](https://www.syntaqx.com/books/investing-and-digital-assets/beyond-the-us#the-uae-dubai-s-vara)).
- **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](https://www.syntaqx.com/books/investing-and-digital-assets/crypto-aml-and-travel-rule#counterparty-vasps)).

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