We Need Regulatory Clarity to Keep Crypto Exchanges Onshore and DeFi Permissionless


Centralized exchanges typically custody customer assets, settle transactions off-chain, and have opaque transaction records. Therefore, CEX users may reasonably ask how an exchange will custody assets, secure data, share best price information, and protect them from fraudulent and deceptive trading practices. Yet, instead of addressing these issues with a straightforward compliance path, U.S. regulators have created a Kafkaesque trap, refusing to provide a practical registration option while nonetheless threatening legal action against those who don’t register.