Crypto Exchanges

A crypto exchange is a centralized corporate entity that acts as an intermediary between people to exchange currency for crypto assets

Crypto exchanes are not regulated as market makers or brokers, but instead as money services business which does regulate order book making or protect consumers against market manipulation.

Many crypto exchanges offer their own stablecoin whose reserves may be comingled with customer funds.

Crypto exchanges are commonly set up in jurisdictions with loose or corrupt financial regulatory regimes. These include, but are not limited to:

  • Antigua & Barbuda
  • Seychelles
  • Malta
  • Jersey
  • Isle of Man
  • The Bahamas
  • Cayman Islands
  • Singapore

See also bucket shop, market manipulation, economic cartel, recentralization and platform risk.

References

  1. Doctorow, C. (2022, February 3). Pluralistic: 03 Feb 2022 – Pluralistic: Daily links from Cory Doctorow. https://pluralistic.net/2022/02/03/liquidation-preference/
  2. Ivaniuk, Viktoria. 2020. ‘Cryptocurrency Exchange Regulation – An International Review’. Magda Dziembowska, Robert Dziembowski, Apelacja w Postępowaniu, 67.
  3. White, Molly. 2022. ‘Cryptocurrency Off-Ramps, and the Shift towards Centralization’. Molly White. 12 February 2022. https://blog.mollywhite.net/off-ramps/.
  4. Lefevre, Edwin. 2004. Reminiscences of a Stock Operator. Vol. 175. John Wiley & Sons.
  5. Cumming, Douglas J., Sofia Johan, and Anshum Pant. 2019. ‘Regulation of the Crypto-Economy: Managing Risks, Challenges, and Regulatory Uncertainty’. Journal of Risk and Financial Management 12 (3): 126. https://doi.org/10.3390/jrfm12030126.
  6. Canning, Tonya. 2018. ‘"We Don’t Want Hippy Money”: Contradiction and Exchange in a Local Currency System’. PhD Thesis. https://dalspace.library.dal.ca/handle/10222/74190.
  7. Johnson, Kristin N. 2021. ‘Decentralized Finance: Regulating Cryptocurrency Exchanges’. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3831439.
  8. Mizrach, Bruce. 2021. ‘Stablecoins: Survivorship, Transactions Costs and Exchange Microstructure’. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3835219.
  9. Roubini, Nouriel. 2019. ‘The Great Crypto Heist’. Project Syndicate 16. https://www.project-syndicate.org/commentary/cryptocurrency-exchanges-are-financial-scams-by-nouriel-roubini-2019-07.
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