Automation and the absence of a human backstop in compliance, back office, and settlement create new risks to market integrity on decentralized exchanges, including wash trading, frontrunning, and insider trading.
Source quote, verbatim
The code may also create new risks to market integrity because of its automation and lack of a human backstop in compliance, back office, and settlement.
Wulf A. Kaal, Decentralization and Feedback Effects (2021). SSRN: https://ssrn.com/abstract=3808852
Classification
failuresupport: arguedfailure: no human backstop in automated settlementfamily: human-judgment-displacementeconomicsrisk-and-incentivescompliance
Related claims
extendskaal:claim:3782216-022 The code that constitutes a decentralized exchange can create new risks to market integrity, because automatio...
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