The NICE thing about crypto exchanges is the very high fees they charge (compared to any other financial market). That's why people were so surprised FTX were also committing huge fraud. Why rob your clients illegally at night when you're already "robbing" them legally with fees in the daylight?
As it is, people keep falling back on the SEC "aren't going to give you guidance on how to do <illegal thing>" but that's not what anyone is asking. And it's not even true, the SEC did give Coinbase plenty of advice and their blessing and permission to list publicly, before deciding all crypto is illegal and previous advice doesn't matter...
I'm of the opinion that Gemini is the least-shady exchange, given the involvement of high profile US-resident US nationals, but that same property also makes it much less popular.
Right now, all the liquidity is on Binance. So anyone going elsewhere is looking for less-shady options. That is what disappoints me about the SEC action against Coinbase: they are very high on the "not shady" list, and probably the best for combination of "not shady" AND "actually have liquidity and a workable tech stack". The SEC seem determined NOT to work with them despite Coinbase's best efforts. Meanwhile they loved FTX. It's like they have decided to try and stop all crypto by smashing (only) better options while allowing frauds. <tin foil hat>, I know...
1. The way they are doing something is criminal. (Stealing customer funds, comingling the books with their trading arm, operating while insolvent, failure to KYC/AML.)
2. They are doing something criminal. (They allow trading in illegal products.)
Coinbase is, per the allegations, in category #2. FTX was in #1 and #2. Binance looks to be in #1 to at least some extent (to an unclear degree), and #2.
#1 is a problem for any financial business. Every firm does it to some extent or another. They get punished and fined for it, and restructure operations to avoid repeating those mistakes. It's why compliance departments exist. That an exchange is doing #1 in a small way is not particularly newsworthy. (But if it's doing it in a big way, it is.)
It's just regulatory problem. You can fix it by doing the right thing.
But I'd be shocked if there are any exchanges that are not in category #2. You can't just fix it by tightening up your compliance controls - you have to exit most of you business to do so. But that's not a reason to crack down on them. Just because it's not the exchange's customers that get defrauded by the exchange in #2, doesn't mean that they aren't a ripe category for fraud, by the coin issuers, against the buyers.
You should start one, you'd have a monopoly! :)
The NICE thing about crypto exchanges is the very high fees they charge (compared to any other financial market). That's why people were so surprised FTX were also committing huge fraud. Why rob your clients illegally at night when you're already "robbing" them legally with fees in the daylight?
As it is, people keep falling back on the SEC "aren't going to give you guidance on how to do <illegal thing>" but that's not what anyone is asking. And it's not even true, the SEC did give Coinbase plenty of advice and their blessing and permission to list publicly, before deciding all crypto is illegal and previous advice doesn't matter...