Cryptocurrency trading platforms like FTX have acquired a sheen of legitimacy in recent years by billing themselves as exchanges — creating an association with staid and trusted financial institutions like the New York Stock Exchange and Nasdaq.
But the implosion of FTX shows just how different crypto exchanges are from their more well known, and highly regulated, counterparts. The latter must abide by strict rules about what they can and cannot do. Crypto exchanges face few such hurdles, especially if they are outside the United States — and most are. They don’t have to disclose how customer money is handled, either to investors or to a regulatory body. Internal financial controls can be scant.
Source: A Traditional Exchange? FTX Was Anything But. – The New York Times
