Professor Campbell Harvey (Duke University) and Professor Joel Hasbrouck (NYU Stern) explain the novel risks for traders who trade at Decentralized Exchanges (DEXs) and why standard regulatory approaches are not well-suited for addressing those risks. The podcast then discusses the feasible paths for regulation weighing the relative advantages and disadvantages. An important point is that regulators are not necessarily properly aware of the challenges of regulation in the blockchain context and, as a consequence, some regulatory actions being taken might be counter-productive.

Paper: The Evolution of Decentralized Exchange: Risks, Benefits, and Oversight