Legal Matters in Web 3: A Desk Reference: Centralized Exchanges

O’Melveny partner Scott Sugino and counsel Bill Martin contributed a chapter on Centralized Exchanges (CEXs) in Legal Matters in Web 3: A Desk Reference, a guide published by The University of Chicago Law School.

The chapter considers the growth and development of CEXs around the world, which provide an organized marketplace that facilitates the trading of digital assets. “CEXs are designed to function as trusted intermediaries, which provide users with access to digital assets, liquidity to support trading those assets, and custodial services in a secure and centralized environment,” the authors write. “Like centralized exchanges for stocks or other traditional assets, CEXs offer asset standardization, peer-to-peer trading, firm bids and offers, and price transparency. These features are what make CEX platforms attractive to both experienced traders and newcomers to crypto. CEXs are critical players in today’s crypto industry.” Sugino and Martin highlight how some of the largest CEXs by trading volume, such as Binance.com, Coinbase, and Kraken, have brought crypto into the mainstream through innovative and easy-to-use interfaces, as well as discussing how some are now facing ongoing litigation and scrutiny from the SEC.

Sugino specializes in technology-focused mergers and acquisitions, private equity and venture capital investments, and business structuring in the highly regulated fintech industry. Scott is a trusted advisor to leading technology companies and technology-focused investors. His clients range from early-stage startups to large public companies across a number of important technology sectors.

Martin holds nearly two decades of private practice and government experience, including working as a former senior counsel in the US Securities and Exchange Commission’s Market Abuse Unit. He is well placed to guide financial services companies, blockchain and other fintech companies, audit and special committees, officers and directors, and others in connection with internal investigations, government and regulatory inquiries and enforcement actions, and litigation.

Access the full publication here.