The SEC Comes for Bittrex

The basic rule in the US is that, if you operate a stock exchange, you need to register with the US Securities and Exchange Commission as a national stock exchange. This comes with a lot of oversight; in particular, the rules of your exchange have to be published and transparent and approved by the SEC.

I suppose you could debate what qualifies as a stock exchange. Roughly, an exchange is a venue for bringing together buyers and sellers of stock so they can trade with each other, but in modern finance there are gray areas. There are some things that look sort of like stock exchanges — dark pools, alternative trading systems — that are not actually registered as stock exchanges. But they are registered with the SEC too, and the SEC also supervises their operations. For that matter there are stockbrokers: A broker’s website and mobile app can look and feel a bit like a stock exchange, to a retail customer; you can log onto Robinhood and see prices and buy and sell stock. But there are rules distinguishing brokers from exchanges (a broker mostly does not provide a platform for people to trade with each other, but routes orders to other market venues), and anyway broker-dealers are also registered with the SEC. Also stock clearinghouses (which settle trades, moving stock from the seller to the buyer) have to register. Basically any stock-exchange-like thing has to register with the SEC.