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(Cryptocurrency) exchanges are organized markets where people and entities exchange an amount of cryptocurrency for fiat money or another cryptocurrency. Having no legal or regulatory basis with regard to cryptocurrencies, the term "exchange" is used informally for a broad swath of businesses.


The U.S. Securities and Exchange Commission's (SEC's) Divisions of Trading and Markets and Enforcement formally warned the public not to be confused about the term "exchange" being used by trading platforms which are not regulated or overseen by the SEC, stating, "Many platforms refer to themselves as "exchanges," which can give the misimpression to investors that they are regulated or meet the regulatory standards of a national securities exchange."[1]

On August 1, 2018, CoinMarketCap reported on and ranked 207 different cryptocurrency exchanges from around the world.[2] Markets Media Group Traders magazine estimated the number of number of exchanges to be more than twice that at over 500 of them.[3]

In March 2018, a cryptocurrency trader named Sylvain Ribes published an indictment of cyrptocurrency exchanges' volume reporting practices.[4] CoinMarketCap, which is a widely followed crypto data reporter, started reporting adjusted data for cryptocurrency exchanges during Summer 2018.[5] The newly formed Blockchain Transparency Institute began taking an independent view of exchange trading volumes and reporting on them in August 2018.[6]

Cryptocurrency exchanges have often been hacked, frequently with losses valued in multiple millions of U.S. dollars. The two largest publicly known hacks - $450 million at Mt. Gox in 2014 and $535 million at Coincheck in 2018 - occurred at Japanese exchanges.[7]

Decentralized exchanges

Most cryptocurrency exchanges in the U.S. are electronic platforms. Recently, a new type of trading platform called a decentralized exchange - sometimes called a "DEX" platform - has emerged.[8] Unlike "centralized" exchanges, which hold their users' assets, decentralized exchanges do not require users to make accounts or deposit their assets. Theoretically, this makes them resistant to hacking attacks, although currently there are only a small number of users on them, and consequently they do not currently have strong liquidity.[9]


As of the end of September 2018, there were no regulations at the state or federal level targeted directly at cryptocurrency exchanges per se, although some of their business activities require registration. Most U.S. states would require cryptocurrency exchanges that do business with residents to register with them locally as "money transmitters," and exchanges that operate across state lines must register with the U.S. Financial Crimes Enforcement Network division of the U.S. Treasury Department.[10]

At least until In 2018, the New York State Attorney General released a voluntary survey for cryptocurrency exchanges, including Coinbase, Gemini, and Kraken. Four exchanges - Binance,, Huobi, and Kraken, declined to participate in the survey, claiming exemption from New York regulation because, they said, they did not offer their services to New York residents. The New York AG later released a report in September, highlighting the possibility that some of these exchanges might be operating illegally in the state. The report said that "many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges. The report also cited "serious conflicts of interest" evident in the business models and operations of some of these exchanges, as well as a general lack of transparency and auditability in the management of their platforms.[11][12][13]