Professor Jack Graves provides insight into the lack of regulation in domestic and international cryptocurrency exchanges and its risks and implications to consumers at Crypto Compass.
Graves explains that whereas exchanges reminiscent of Coinbase are licensed cash transmitters, they don’t seem to be broker-dealers. “As soon as you talk about broker-dealers of securities, that triggers a bunch of disclosure and custody requirements,” Graves states. “I happen to use Fidelity as my brokerage company, and if Fidelity goes bankrupt, I’m not an unsecured creditor in bankruptcy. So, I have a claim to my assets before all the unsecured creditors.”