Early history

In 2004 three Australian-based digital currency exchange businesses voluntarily shut down following
an investigation by the Australian Securities and Investments Commission (ASIC). The ASIC viewed
the services offered as legally requiring an Australian Financial Services License, which the
companies lacked.[7]
In 2006, U.S.-based digital currency exchange business Gold Age Inc., a New York state business,
was shut down by the U.S. Secret Service after operating since 2002.[8] Business operators Arthur
Budovsky and Vladimir Kats were indicted "on charges of operating an illegal digital currency
exchange and money transmittal business" from their apartments, transmitting more than $30 million
to digital currency accounts.[5] Customers provided limited identity documentation, and could transfer
funds to anyone worldwide, with fees sometimes exceeding $100,000.[5] Budovsky and Kats were
sentenced in 2007 to five years in prison "for engaging in the business of transmitting money without
a license, a felony violation of state banking law", ultimately receiving sentences of five years'
probation.[9]
In April 2007, the U.S. government ordered E-Gold administration to lock/block approximately 58 E-
Gold accounts owned and used by The Bullion Exchange, AnyGoldNow, IceGold, GitGold, The
Denver Gold Exchange, GoldPouch Express, 1MDC (a Digital Gold Currency, based on e-gold) and
others, forcing G&SR (owner of OmniPay) to liquidate the seized assets.
A few weeks later, E-Gold faced four indictments.[10]
In July 2008, WebMoney changed its rules, affecting many exchanges. Since that time it became
prohibited[by whom?] to exchange WebMoney to the most popular e-currencies like E-gold, Liberty
Reserve and others.
Also in July 2008 E-gold's three directors accepted a bargain with the prosecutors and pleaded guilty
to one count of "conspiracy to engage in money laundering" and one count of the "operation of an
unlicensed money transmitting business".[11] E-gold ceased operations in 2009.
In 2013, Jean-Loup Richet, a research fellow at ESSEC ISIS, surveyed new money
laundering techniques that cybercriminals were using in a report written for the United Nations Office
on Drugs and Crime.[12] A common approach to cyber money laundering was to use a digital currency
exchanger service which converted dollars into Liberty Reserve and could be sent and received
anonymously. The receiver could convert the Liberty Reserve currency back into cash for a small
fee. In May 2013, digital currency exchanger Liberty Reserve was shut down after the alleged
founder, Arthur Budovsky Belanchuk, and four others were arrested in Costa Rica, Spain, and New
York "under charges for conspiracy to commit money laundering and conspiracy and operation of an
unlicensed money transmitting business."[13] Budovsky, a former U.S. citizen and naturalized Costa
Rican, was convicted in connection with the 2006 Gold Age raid.[9] More than $40 million in assets
were placed under restraint pending forfeiture, and more than 30 Liberty Reserve exchanger domain
names were seized.[13][14] The company was estimated to have laundered $6 billion in criminal
proceeds.[13]

2014 to present
Following the launch of a decentralized cryptocurrency bitcoin in 2008 and the subsequent
introduction of other cryptocurrencies, many virtual platforms were created specifically for the
exchange of decentralized cryptocurrencies. Their regulation differs from country to country.
In February 2014, Mt. Gox, the largest cryptocurrency exchange at the time, suspended trading,
closed its website and exchange service, and filed for bankruptcy protection in Japan from
creditors.[15][16] In April 2014, the company began liquidation proceedings.[17] This was the result of a
large theft of bitcoins that were stolen straight out of the Mt. Gox hot wallet over time, beginning in
late 2011.[18][19]
In December 2021 the MyCryptoWallet exchange called in liquidators.[20]

Examples
In early 2018, Bloomberg News reported the largest cryptocurrency exchanges based on the volume
and estimated revenues data collected by CoinMarketCap.[21] Similar statistics was reported on
Statista in a survey by Encrybit to understand cryptocurrency exchange problems. According to the
survey, the top three cryptocurrency exchanges are Binance, Huobi, and OKEX. Other data points in
the survey included the problems that cryptocurrency traders experience with cryptocurrency
exchanges and the expectation of traders. Security and high trading fees are the top
concerns.[22][23] The exchanges are all fairly new and privately held. Several do not report basic
information such as the names of the owners, financial data, or even the location of the business.[24]

 Binance
 Bitfinex
 Bithumb
 Bitstamp
 Coinbase
 Huobi
 Kraken
 OKEx
 Upbit

Legislation
See also: legality of bitcoin by country or territory
By 2016, several cryptocurrency exchanges operating in the European Union obtained licenses
under the EU Payment Services Directive and the EU Electronic Money Directive.[25] The adequacy
of such licenses for the operation of a cryptocurrency exchange has not been judicially tested. The
European Council and the European Parliament announced that they will issue regulations to
impose stricter rules targeting exchange platforms.
In 2018, the U.S. Securities and Exchange Commission maintained that "if a platform offers trading
of digital assets that are securities and operates as an "exchange," as defined by the federal
securities laws, then the platform must register with the SEC as a national securities exchange or be
exempt from registration".[26] The Commodity Futures Trading Commission now permits the trading of
cryptocurrency derivatives publicly.[27]
Among the Asian countries, Japan is more forthcoming and regulations mandate the need for a
special license from the Financial Services Authority to operate a cryptocurrency exchange.[28] China
and Korea remain hostile, with China banning bitcoin miners and freezing bank accounts.[29][30] While
Australia is yet to announce its conclusive regulations on cryptocurrency, it does require its citizens
to disclose their digital assets for capital gains tax.[31]