Mapping the Intersection of Cryptocurrency Exchanges, Users, and Regulation

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The advent of cryptocurrency exchanges developed a convenient route and access to cryptocurrencies for the mass population. Currently, exchanges are entrusted with the safekeeping and the daily facilitation of millions worth of funds on a global scale. However, their rapid propagation and prospering turned exchanges into attractive targets for criminalsand cyberattacks. This can be attributed to many factors, including the long-lasted absence of globally coordinated, standardised, and suitable legal frameworks, comprehensive of all aspects covering cryptocurrencies. Most current domestic and regional regulations comprise Anti-Money laundering (AML) and Countering the Finance of Terrorism (CFT) rules, and often neglect other vital areas that urgently mandate intervention, such as consumer protection, financial crime, privacy, and security compliance.The ramifications attributed to this abundant situation are numerous and diverse. As a start, regulators rushed into imposing the same AML/CFT measures tailored to suit the conventional financial/banking system, onto the divergent environment of cryptocurrencies. This poses major privacy and cybersecurity risks, as the level of legal and security compliance of exchanges is unclear/unknown. Due to regulatory shortcomings, and lack of proper legal and security compliance, not only exchanges are becoming victims of cybercriminals, but many can easily facilitate such crimes. Consumers, on the other hand, are growingly turning into the prime victims of these crimes, attacks, and sundry other risks arising from the self regulation of exchanges.In this Ph.D. thesis, we aim to study and unravel the multidimensional factors and the risks arising from the intersection of exchanges, consumers/users, and regulators within the cryptocurrency sphere. This will be achieved by employing both multidisciplinary and interdisciplinary research methods that incorporate legal, computer science, and crime science research instruments.The primary goals of this research are 1) to produce scientific evidence that would aid legislators in the policymaking process; this is especially true in light of studying and assessing the adequacy of newly adopted regulations such as the Markets in Crypto-Assets regulation (MiCA) and other AML/CFT policies; 2) assist law enforcement agencies in identifying potential exchanges that might appeal to criminals, and/or acting as crime facilitators/channels; 3) advocate the creation of a safer and secure environment for consumers based on the principles of accountability, liability, compliance, transparency, and privacy.