Market makers provide liquidity to the crypto market primarily by continuously quoting prices—placing both buy and sell orders. But this seemingly simple activity actually involves a complex regulatory framework behind the scenes.

Most countries regulate market-making activities under the scope of "Virtual Asset Service Providers" (VASP) or "Crypto Asset Service Providers" (CASP). Once activities involve facilitating transactions for clients or acting as an agent for asset management, regulators will step in. This is not just a liquidity issue but also involves compliance costs, customer identity verification, anti-money laundering requirements, and a host of other considerations.

Therefore, the regulations governing market-making vary greatly across different countries and regions. Some places are lenient, while others are extremely strict. Practitioners need to understand the specific requirements of their operating jurisdiction to avoid pitfalls.