Without 20x margin trading, you can only be profitable running a spot exchange if you are in the top 3. Everyone below the top 3 has been operating in the red.

Without 20x margin trading, you can only be profitable running a spot exchange if you are in the top 3. Everyone below the top 3 has been operating in the red. Even the exchange that Binance bought has been operating in the red for years. You cannot run a fully compliant exchange with trading, AML/KYC, and custody under one roof and be profitable. The IT controls and operational costs are too much. Moreover, there are not enough regulators in Japan with IT system experience to actually vet companies wanting to enter the market (see https://www.ft.com/content/75a05077-6ac8-4365-a8c5-28fc8928b505 https://www.ft.com/content/75a05077-6ac8-4365-a8c5-28fc8928b... ). The salary differential between a civil servant and an IT systems auditor is really big. Companies, even if compliant, have to wait a long time to get their application process inspected. It took Coinbase 3 years to enter the Japan, which is quite bad. I think the future will be splitting up the concept of exchange. I think only stable coin issuers will survive. You issue stable coins then let customers trade on DEXs. Stable coin issuers only deal with AML and some KYC. Since issuers can remotely freeze ETH addresses, AML is relatively easy as long as regulators don't be come too anal (unlike EU MiCA and FATF travel rule).