By Alexander Waksman, gunnercooke LLP.
Crypto exchanges operate in a dynamic, fast-paced environment in which the contours of competition are still evolving. However, the main parameters of competition among crypto exchanges, their economic characteristics, and current market data suggest that the sector may concentrate in the coming years. Crypto exchanges will soon attract attention from antitrust agencies, driven by an uptick in M&A, the sector’s prominence, the sheer size of crypto exchanges, and agencies’ experience with traditional trading venues.
Agencies and crypto exchanges ought proactively to engage, laying the ground for an antitrust policy that supports crypto’s growth – they should not wait for the first public enforcement cases to arise. Specifically, agencies should use their advocacy functions with respect to crypto regulation; exchanges should educate officials on crypto’s procompetitive benefits; and agencies and exchanges should work together to filter complaints.
