An impressive series of scandals and market crashes, including FTX, Celsius and Voyager, have shown the weaknesses of crypto-economy’s market infrastructures. Crypto-trading platforms have become dominant financial institutions, acting as trading venues, broker-dealers, and lenders at the same time. This Article conducts a conceptual, and empirical analysis of crypto-trading platforms and their activities, identifies and documents the causes of this concentration of functions, and illustrates how such concentration poses risks to both investors and the financial system. Therefore, this Article proposes regulating crypto-trading platforms as exchanges, limiting the perimeter of their activities.This Article examines the transformation of trading venues, from public stock exchanges to fragmented private marketplaces. It contextualizes the rise of crypto-trading platforms as part of this phenomenon and compares them with both public stock-exchanges as well as broker-dealers and alternative trading systems (ATS) managing private trading venues. Through a theoretical and empirical analysis focusing on crypto-trading platforms’ activities, this Article demonstrates that these market infrastructures have shifted towards a full-service business model for the crypto-economy, changing the traditional market structure. They act as intermediaries, issuing their own stablecoins, offering custodial services, accepting deposits, issuing loans, and distributing risky financial instruments. This creates unprecedented conflicts of interest and systemic risks that have not been previously associated with market infrastructures in traditional finance.The current business model of crypto-trading platforms and the resulting market structure emerging in the crypto-economy have profound implications for financial law and policy. This Article suggests strengthening international cooperation to prevent regulatory fragmentation of crypto-trading platforms, and regulating them as exchanges rather than broker-dealers. This approach would limit the number of services they can provide, and would lead to a shift in their business model. It would also contribute to enhancing investor protection while reducing systemic risks and effectively addressing the challenges presented by technology-driven financial capitalism
