Virtual asset trading platforms share a vocabulary that blends market structure, technology, and regulation. This glossary captures the essential terms a VATP team or partner needs when designing a licensed venue.
- Virtual asset trading platform (VATP): A centralized venue with custody, matching, and settlement for virtual assets, run with regulated market controls.
- Virtual asset: A digital representation of value, including cryptocurrencies, stablecoins, NFTs, and tokenized claims on real world assets.
- Tokenization: Converting rights to an asset into digital tokens, enabling 24/7 transfer and settlement on a VATP.
- Real world assets (RWA): Off-chain assets such as bonds, real estate, or invoices that are represented as tokens.
- Domain name virtual assets: Premium domains treated as tokenized property, tradable on VATPs with price discovery and fractional ownership.
- Order book: The list of bids and offers for an asset; VATPs typically use central limit order books for price discovery.
- Market maker: A participant quoting continuous bids and offers to keep spreads tight and depth consistent.
- Surveillance: Monitoring for spoofing, wash trading, layering, and other abusive patterns, paired with documented escalation.
- Custody segregation: Separation of client and house assets, with reconciliation, attestations, and secure key management.
- Travel rule: The requirement to pass originator and beneficiary information alongside virtual asset transfers between VASPs.
- KYC / AML: Know your customer and anti money laundering controls, including identity verification and transaction monitoring.
- Proof of reserves: Evidence that a platform holds client assets in full, often using on-chain attestations or independent audits.
- Listing governance: A framework for evaluating new assets, documenting approvals, and scheduling ongoing reviews or delistings.
- Technology risk management: Policies and controls that cover change management, logging, capacity planning, and security testing.
- Incident response: A documented plan for containing, communicating, and remediating outages or security events.
- Stablecoin: A token designed to track a reference asset such as USD, often used as a quote or settlement currency on VATPs.
- Liquidity program: Incentives and fee structures aimed at attracting market makers and balancing depth across pairs.
- Professional investor: A client classification that affects product access under regimes such as Hong Kong’s VATP rules.
- OTC desk: An off-exchange trading desk that may connect to VATPs for inventory, liquidity, or hedging.
- FIX gateway: A standardized protocol used by brokers and institutions to connect to a VATP with deterministic performance.
- Proof of liabilities: Transparency around client obligations, paired with proof of reserves to show full coverage.
- Cold wallet: Offline key storage used to reduce attack surface for the majority of client assets.
- Hot wallet: Online storage used for operational liquidity; balances are limited and heavily monitored.
- Data room: A controlled repository of policies, logs, and evidence for regulators, banks, or partners performing due diligence.
- Rehypothecation: The reuse of client assets; licensed VATPs typically prohibit it to maintain segregation.
Keeping these definitions consistent across documentation, product decisions, and partner conversations reduces friction and speeds up licensing work.