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This chapter differentiates between centralized and decentralized exchanges (DEXs), emphasizing the importance of regulations and compliance related to the market’s development and expansion for cryptoasset trading and investment. It also explains the pros and cons of using different methods to trade cryptocurrencies or virtual currencies and their tradeoffs. The chapter discusses how centralized and DEXs emerged, their history and potential future, and the possible role of future regulations and regulatory clarity around how they may operate. Additionally, it compares cryptoasset markets to other more traditional markets such as equities, real estate, and foreign exchange.

This paper aims to focus on the need for an enhanced anti-money laundering (AML) regulation for decentralised finance (DeFi) to protect the integrity of global financial systems against illicit activities. Research highlights the requirement for a robust regulatory strategy for the fast-paced DeFi evolvement.

This study used doctrinal legal research by analysing legislation, which involved creating use cases to illustrate different aspects of potential illicit activities via the DeFi ecosystem. Various DeFi applications were assessed for the potential regulatory responses and outcomes.

This paper offers valuable insight into the regulatory challenges presented by DeFi. This study addresses the blind spots leveraged by criminals afforded by the DeFi’s decentralised nature. This paper offers a comprehensive examination of DeFi regulatory challenges based on use-case scenarios and provides recommendations for regulators on how to address them effectively.

This paper proposes measures for regulatory authorities to minimise money laundering risks through new channels such as decentralised exchanges, non-custodial wallets and cross-chain bridges. This study concludes with the future directions for DeFi regulation and AML compliance.

This paper aims to explain the architecture and design choices of the exchange. Lykke is a FinTech company based in Zurich that has launched the global marketplace for all asset classes and instruments digitized on the blockchain. The authors discuss how the exchange will evolve over time. They explore the macroeconomic benefits of the new blockchain technology. The Lykke exchange is compatible with any type of public blockchain.

The authors present the architecture of an exchange for colored coins. By colored coins, they mean issuer-backed securities on the Bitcoin blockchain. Orders are collected and matched by a semi-trusted exchange. Matched orders are settled on the Bitcoin blockchain, where each successful trade between parties appears as a set atomic-colored coins swap transactions. Unfilled and expired orders are discarded. The exchange does not take possession of the traded coins, but needs to be trusted to match trades correctly.

Lykke has launched the exchange initially for the main currencies, cryptocurrencies and Lykke coin (entitlement to the shares of Lykke company). Perspective asset classes include futures and options on digital assets, crowd-funded loans for retail and private equity financing for small and medium-sized enterprises, contracts for difference, zero coupon bonds and other fixed income and natural capital bonds.

Lykke exchange and all its tools and services are open source; the transparency of technology is ideal for research. The paper provides a high-level overview of the exchange and concludes with a research agenda.

The paper provides new evidence for Bitcoin’s safe-haven property by examining the relationship between currency price, return and Bitcoin trading volume.

A unique dataset from a person-to-person (p2p) exchange is used to investigate association between Bitcoin trading volume and currency prices. Currency returns are used to identify local economic crises, the 8 crisis affected currencies are Venezuela Bolivar (VES), Iranian Rial (IRR), Ukrainian Hryvnia (UAH), Argentine Peso (ARS), Egyptian Pound (EGP), Nigerian Naira (NGN), Turkish Lira (TRY) and Kazakhstani Tenge (KZT).

The paper demonstrates that local economic crises are positively associated with increased Bitcoin trading. There is a negative association between trading volume and currency value (and return), suggesting low currency price and currency depreciation are accompanied with increased Bitcoin trading. The results not only hold for the crisis affected currencies but also currencies of advanced economies. Granger causality test also reinforces the negative association results.

The finding indicates some forms of flight-to-safety have occurred during local market crises when capital flight from domestic markets to Bitcoin, strengthening Bitcoin’s hedging asset status. However, total global trading volume declines after the start of the COVID pandemic, suggesting that Bitcoin is still regarded as a speculative asset. Overall, the findings show that Bitcoin is a hedging asset to protect against local currency depreciation, but not a safe-haven asset for the global crisis.

In the pursuit of co-exploration, the strength and brokerage dimensions of dyadic ties create a novelty–action trade-off: tie strength facilitates coordination but constraints novelty, while tie brokerage expands knowledge diversity but aggravates coordination difficulty. This study contributes towards a better understanding of this tension by comparing two dimensions of relational ties and examining their contingent values given different environmental factors and exchange characteristics.

The authors used survey data from 194 matched buyer–supplier dyads in China's high-tech industries and employed hierarchical moderated regression analysis to test the proposed hypotheses.

The authors find that compared with tie strength, tie brokerage has a stronger positive effect on co-exploration. Moreover, guanxi importance amplifies the effect of tie strength while decreasing the value of tie brokerage. As market uncertainty increases, the role of tie brokerage becomes more salient. Additionally, tie strength becomes less effective when buyer centralization is high, whereas tie brokerage exerts a stronger impact on co-exploration when an exchange is highly formalized.

This study contributes to the supply chain literature by adopting a relational perspective to integrate relational ties into the study of buyer–supplier co-exploration and by elaborating on the different implications of tie strength and tie brokerage in resolving the novelty–action trade-off. Furthermore, it provides a more nuanced understanding of when distinct dimensions of relational ties are effective, by clarifying boundary conditions in terms of environmental factors and exchange characteristics.

In the age of DarkNetMarkets proliferation, combatting money laundering has become even more complicated. Constantly evolving technologies add a new layer of difficulty to already intricated schemes of hiding the cryptocurrency’s origin. Considering the latest development of cryptocurrency- and blockchain-related use cases, this study aims to scrutinize Italian and Russian antimoney laundering regulations to understand their preparedness for a new era of laundering possibilities.

One of the most recommended ways to buy and sell cryptocurrencies for illegal drug trade on DarkNet was discovered using machine learning, i.e. natural language processing and topic modeling. This study compares how current Italian and Russian laws address this technique.

Despite differences in cryptocurrency regulation, both the Italian Republic and the Russian Federation fall behind on preventing cryptolaundering.

The main contributions of this paper: consideration of noncustodial wallet projects and nonfungible token platforms through the lens of money laundering opportunities, comparison of Italian and Russian antimoney laundering regulations related to cryptocurrency, empirical analysis of the preferred method of trading/exchanging cryptocurrency for DarkNet illegal trade using machine learning techniques and the assessment of how Italian and Russian regulations address these money laundering methods.

The current security trade settlement life cycle presents several inefficiencies derived from intermediaries involved in the transaction between buyers and sellers. This chapter examines distributed ledger technology (DLT), the underlying technology of all blockchain applications, including trade settlements. It also reviews the implications of using blockchain in trade settlements for cryptoassets. Emerging blockchain technology provides investors, exchanges, regulators, and countless potential intermediaries with the most up-to-date technology with the highest efficiency, transparency, credibility, and automation enabled by smart contracts. Smart contracts allow an ecosystem to manage the process of trade settlements starting from execution to clearing and then settlement. These contracts reduce reconciliation and recordkeeping costs and streamline repetitive processes present in today’s trade settlement system. The chapter highlights the benefits of implementing DLT in financial markets globally in all trading aspects, including cryptoassets.

Decentralized finance is a technological infrastructure built on a blockchain networking environment that supplies transparent, uncensorable, and decentralized financial services and products. This infrastructure offers the opportunity to replicate traditional financial instruments on a decentralized platform and incorporate added features provided by blockchain technology. It also allows the creation of new instruments native to blockchain technology unavailable through traditional financial institutions. This chapter presents an in-depth analysis of the inner workings of stablecoins, decentralized exchanges, automated market makers, liquidity pools, decentralized lending, synthetic instruments, and asset management. It also provides specific examples for each application and presents some current challenges the sector faces.

The purpose of this paper is to critically evaluate the different market‐making systems found in most developed capital markets and to provide guidance to emerging market regulators for a possible implementation of such a system.

The paper looks closely at the market design of seven developed countries focusing on the obligations and privileges of market makers. Through a case study and empirical evidence the paper identifies advantage and disadvantage of a possible implementation of a similar design to an emerging market.

The paper identifies three forms of market making applied today: the quote‐driven, the centralized and non‐centralized systems. Four factors are proposed that regulatory authorities in emerging markets should consider when deciding whether, and which of, the three market‐making systems they should implement. These are: current exchange design and the costs of restructuring, international and domestic investors' sentiment towards the exchange, size of the emerging market and the market designs in countries hosting the target foreign capital.

The paper looks at the implementation of a market‐making system in an emerging market. Further research may investigate other ways of how emerging markets authorities can restructure their markets into more efficient, compatible and trustworthy financial venues in order to attract both domestic and foreign investors.

The area of emerging markets' microstructure design and market quality is still relatively under‐studied. We provide evidence of the challenges and benefits of the implementation of a market‐making system in those markets.

Relationships between long-distance exchange, especially of luxury goods, and the centralization of political power represent a fundamental dimension of political and economic organization. Precolumbian American societies, outside familiar European contexts that have shaped analytical perspectives, provide a broadened comparative field with the potential for more nuanced analysis.

Analysis focuses on four cases that vary in political centralization, institutional complexity, and geographic scale: Ulúa societies without political centralization; small Maya states; Aztec; and Inka empires. Emphasis on relationships between principals and agents highlights the potential of social practices to perform the functions often associated with state institutions

In the Ulúa region, commerce flourished in the absence of states and their concomitants. The very wealth of Ulúa societies and the unusually broad dispersion of prosperity across social segments impeded the development of states by limiting the ability of local lords to intensify their status and convert it to political power. Intensity of market activity and long-distance exchange does not correlate well with the florescence of states. Less centralized and non-centralized political systems may in fact facilitate mercantile activity (or impede it less) in comparison with states.

These cases frame a useful perspective on the organizational configuration of long-distance trade. Informal social mechanisms and practices can be an alternative to state institutions in structuring complex economic relations. The implications for understanding trajectories of societal change are clear: the development of states and centralized political organization is not a prerequisite for robust long-distance commerce.