How do regulatory frameworks and governance structures of cryptocurrency exchanges influence their product offerings, geographic reach, and exposure to enforcement actions?

Abstract

As market power is growing in centralized cryptocurrency exchanges (CEXs), they are increasingly exposed to more advanced global regulation and scrutiny. The exchanges vary widely in control arrangements–ranging from regulated, publicly traded markets to opaque offshore entities. This project analyzes how regulatory environment and governance arrangements shape the operational profiles of cryptocurrency exchanges, with emphasis on product offerings, geographic access to markets, and exposure to enforcement action. We constructed a formal database of over 200 CEXs from public announcements, licensing registries, exchange transparency reports, and regulatory filings. For each exchange, we identified its ownership structure, legal domicile, product types (e.g., spot, futures, staking), known licenses, regulatory frameworks followed, and documented cases of enforcement or judicial sanctions. We labeled exchanges by governance transparency (i.e., recognized executives, investor backing) and jurisdictional risk according to regulatory stringency. Preliminary results indicate that exchanges with strong internal governance and militant licensing are well placed to maintain wider product offerings across more jurisdictions with less legal upheaval. On the other hand, light-touch jurisdiction-based exchanges (i.e., Seychelles, British Virgin Islands) restrict product offerings in central markets and face more recurring enforcement. This study offers a comparative framework for analyzing the institutional maturity and legal exposure of CEXs. It provides insights for regulators, institutional investors, and researchers seeking to know how organizational and regulatory structures determine risk and reach in digital asset markets.