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Launched in May 2019 and based in Hong Kong, FTX is an exchange that was, in its own words, built by traders, for traders. The exchange itself is a cryptocurrency derivatives exchange (more on that in a sec) which offers its users a variety of innovative and unique trading options, some of which can't be found elsewhere, with higher risks and rewards to match.

A bill reportedly moving through the Iranian parliament would include digital currencies in the existing "currency smuggling" and foreign exchange regulations. If passed, the law would make it mandatory for cryptocurrency exchanges to obtain a license from the country's central bank for operation under the current guidelines for the foreign currency exchange. This might cripple the growing cryptocurrency demand in the country.

Singapore's DBS is launching a digital currency exchange allowing both institutional and retail customers to trade crypto-assets against multiple fiat currencies. The bank updated its website showing the upcoming crypto exchange services but later took the page down. The cached version of the now-deleted webpage is still available. Dubbed DBS Digital Exchange, the crypto trading platform is planning to list four top cryptocurrencies, Bitcoin, Ether, Ripple, and Bitcoin Cash, against multiple fiats, including the Singapore dollar, US dollar, Hong Kong dollar, and Japanese yen.

According to a CipherTrace study 56% of virtual asset service providers lack strong know-your-customer (KYC) practices, and 81% of decentralized exchanges (DEXs) have little-to-no user verification. The study analyzed more than 800 cryptocurrency exchanges, as well as over-the-counter trading desks and other kinds of service providers. It looked at 21 DEXs, which have seen massive trading volume growth over the past year, and are designed to let users exchange currencies without a third party and therefore bypass certain regulatory obstacles.

SIX Digital Exchange (SDX) formally received the go-ahead from the Swiss Financial Market Supervisory Authority (FINMA) to operate a stock exchange and a central securities depository for digital assets in Switzerland. This authorization enables SDX to go live with a fully regulated, integrated trading, settlement, and custody infrastructure based on distributed ledger technology for digital securities. https://www.finma.ch/en/news/2021/09/finma-issues-first-ever-approval-for-a-stock-exchange-and-a-central-securities-depository-for-the-trading-of-tokens/

Chinese crypto-asset exchange Huobi announced that it has stopped account registration for new customers in mainland China and will close down the accounts for existing mainland Chinese users by December 31. Huobi had already been scaling back its operations and product offerings in China. In July, Huobi closed its Beijing Huobi Network Technology entity and tightened over-the-counter trading restrictions. The exchange, in June, stopped offering crypto derivatives trading to users in China and Taiwan. The exchange had also stopped hosting Bitcoin mining services and providing leverage trading.

Japanese exchange Liquid has been hacked, with about $80 million in digital assets moved off the platform. The exchange confirmed the security breach in a Thursday tweet, with Liquid revealing the wallet addresses implicated in the breach. The exchange noted that only its warm wallets were affected, adding that its assets are currently being moved into cold storage.

ProShares' Bitcoin Strategy ETF, the first Bitcoin U.S. futures-linked exchange-traded fund began trading on the New York Stock Exchange. The addition of the crypto fund to a major stock exchange follows years of deferred decisions from the Securities and Exchange Commission (SEC).

Fidelity's Wise Origin Bitcoin Trust exchange-traded fund (ETF) proposal, submitted by Cboe BZX Exchange, has been disapproved by the U.S. Securities and Exchange Commission (SEC). The SEC concluded that BZX did not meet the requirement that the rules of a national securities exchange be "designed to prevent fraudulent and manipulative acts and practices" and "to protect investors and the public interest." Last week, the SEC shot down a proposed spot Bitcoin ETF from First Trust and Skybridge Capital on identical grounds.

"More broadly, if you take this decision seriously, it means that the SEC has essentially no jurisdiction over crypto. Most token sales will either be (1) direct to institutional investors or (2) on exchanges. Sales on exchanges, says Judge Torres, are not securities offerings, because the buyer doesn't know that she is giving money to the issuer. Sales to institutional investors are securities offerings, but anyone selling anything to institutional investors in 2023 can do so under an exemption from securities registration. (Securities registration is only for public sales, not sales to big institutions.) So basically no crypto sales will ever require SEC registration, no crypto exchange or brokerage will be a securities exchange or brokerage,12 and the SEC is out of crypto entirely."

The World Federation of Exchanges (WFE) has put forth six key principles for crypto trading platforms (CTPs) that are serious about meeting the standards expected of credible market operators. These include segregating market infrastructure functions, having in place systems and controls, holding sufficient financial resources to meet expected operational stress events, facilitating compliance with best execution requirements, increases robustness of listing standards, and having appropriate governance and management requirements. https://www.world-exchanges.org/news/articles/wfe-publishes-research-exchange-engagement-crypto-market-functioning-development

Crypto bank Silvergate Capital's stock is down about 47% since the news about FTX started to break, and there is chatter that Silvergate could be facing a run. Its Silvergate Exchange Network (SEN) operates as a real-time dollar and euro payments network for crypto exchanges and institutions (see graphic below). At the end of the third quarter, Silvergate had 1,677 customers, including all of the major crypto exchanges and more than 1,000 institutional investors, using SEN and about $12 billion of non-interest-bearing deposits. Silvergate doesn't charge clients fees to use the SEN network so its main source of revenue is the carry on those deposits. What's probably driving the stock decline are investor concerns about deposit outflows from its exchange clients, as the crypto market slows down, including roughly $1.2 billion from FTX. However, Silvergate has a highly liquid balance sheet. At the end of the third quarter, the bank had nearly $1.9 billion of cash and cash equivalents and another $8.3 billion of available-for-sale securities that can be quickly converted into cash. Also, as a federally regulated bank, Silvergate could also tap the Federal Home Loan Bank or the Federal Reserve. Nevertheless, the situation bears watching.

US-based cryptocurrency exchanges including Coinbase, FTX US, and Binance.US are overseen on a state-by-state basis as money transmitters. MoneyGram, PayPal and Western are regulated as money transmitters, and starting in the 2010s, crypto exchanges were subsumed under it.  Money transmitter laws are known for lax security requirements, slim capital requirements, an insufficient "ring fencing" of customer funds in the case of bankruptcy and an overly permissive list of investments to which transmitters can deploy their customers' funds. Isn't it about time that crypto exchanges were put under SEC or CFTC oversight?

On April 14, 2023, the US Securities and Exchange Commission (SEC) reopened the comment period on proposed amendments to Rule 3b-16 under the Securities Exchange Act of 1934. The Amendments could significantly expand the number and type of platforms subject to registration with the SEC as exchanges or broker-dealers, including decentralized finance (DeFi) platforms that trade crypto-asset securities. The reopening release requested information and public comment on crypto-asset securities trading on such systems. https://www.sec.gov/news/press-release/2023-77?trk=public_post_comment-text

Australia's Treasury announced plans to introduce a comprehensive licensing regime for crypto exchanges designed to enhance consumer protection, bring clarity to the digital asset sector, and pave the way for the nation to align with global regulatory standards. Under the proposed framework, crypto exchanges operating in Australia will have to obtain an Australian Financial Services license (AFSL) from the Australian Securities and Investments Commission (ASIC). This regulatory measure will be applicable to exchanges that hold more than AUD 1,500 of any single client's assets or have total assets exceeding AUD 5 million. https://treasury.gov.au/sites/default/files/2023-10/c2023-427004-proposal-paper-final.pdf

The Bank of Korea and Korea Exchange signed an agreement to collaborate in exploring distributed ledger technology (DLT) and central bank digital currency (CBDC) for carbon trading. Simulated trials will take place in the third and fourth quarters of 2024. Both organizations already have related programs. The Korea Exchange is currently conducting simulated DLT experiments and plans to support listed security tokens next year. The central bank said this trial would form part of its CBDC usability tests. However, both the exchange and central bank emphasized this is just a test. It will not impact the functioning of current carbon credit markets. http://www.bok.or.kr/portal/bbs/P0000559/view.do?menuNo=200690&nttId=10080261&pageIndex=1

Crypto exchange Kraken will "immediately" end its crypto staking-as-a-service platform for U.S. customers and pay $30 million to settle Securities and Exchange Commission (SEC) charges it offered unregistered securities. Staking is a process in which investors lock up their crypto tokens with a blockchain validator with the goal of being rewarded with new tokens when their staked crypto tokens become part of the process for validating data for the blockchain. The SEC alleged that Kraken was offering investment contracts in exchange for investors' tokens, without providing the proper disclosures and safeguards required by US securities laws. https://www.sec.gov/news/press-release/2023-25

When guessing at the future of crypto, keep in mind that the future of crypto exchanges and the future of crypto assets are very different things. For many pure crypto bugs, the exchanges are a sellout and a concession to older methods of finance and settlement. The exchanges can be regulated, controlled and co-opted, even turned against the notion of individual monetary sovereignty. Instead, the pure crypto vision stresses the notion of "every person their own bank," through the medium of a personal wallet and beyond easy purview of the central authorities. So if the major exchanges are damaged or co-opted by the establishment, pure crypto bugs might celebrate rather than mourn. It is thus a mistake to see the possible demise of crypto in the possible demise of FTX. Instead, the purer crypto vision will be given more of a chance to flourish - or, for that matter, to fail.

The U.S. Securities and Exchange Commission (SEC) approved the first spot exchange-traded funds (ETFs) combining Bitcoin and Ethereum (weighted by free-float market capitalization). The agency has authorized Nasdaq to list the Hashdex Nasdaq Crypto Index US ETF and the CBOE BZX Exchange to list the Franklin Crypto Index ETF. The Hashdex ETF will track the two crypto-assets based on the market capitalizations and prices posted within the Nasdaq Crypto Index. The Franklin ETF will use the will directly use the CF Institutional Digital Asset Index as its valuation source. One of the main factors that the SEC considered for this filing is on surveillance-sharing, an agreement between exchanges to share trading data and essential market information to help detect and prevent fraud and manipulation across connected markets. https://www.sec.gov/files/rules/sro/nasdaq/2024/34-101998.pdf https://www.sec.gov/files/rules/sro/cboebzx/2024/34-101963.pdf

The U.S. Securities and Exchange Commission (SEC) has postponed deciding on whether to approve two proposed crypto-asset exchange-traded funds (ETFs) holding Dogecoin and XRP until June 2025. The postponements were responses to March requests from U.S. exchanges NYSE Arca and Cboe BZX Exchange to list Bitwise's Dogecoin (DOGE) and Franklin Templeton's XRP ETFs, respectively. https://www.sec.gov/files/rules/sro/nysearca/2025/34-102942.pdf https://www.sec.gov/files/rules/sro/cboebzx/2025/34-102944.pdf