ABSTRACT
This chapter explores the ten years of crypto-currency exchange collapse and discusses of how the exchange operators and the regulators responded to the circumstances leading up to and in the wake of the dramatic insolvency of each business. The usual formulation for good faith in business demands care and loyalty of directors and officers of companies. In the wake of Mt Gox, Japanese regulators introduced rules for crypto-currency exchanges to improve governance and security. The Bitfinex hack, the Commodity Futures Trading Commission had been active in enforcing regulations on bitcoin exchanges that offer bitcoin-based trading products. Since the Coincheck hack, Japan’s Financial Service Agency has unveiled plans to allow the crypto industry to self-regulate. Crypto-currency’s decentralised environment is often touted as a practical barrier to regulation. The argument runs that because crypto-currencies reside on networks that cross all borders simultaneously, the code is not ‘at home’ in any one place or on any single server.
