What Are the Legal and Regulatory Implications of an Exchange Halting Trading?

An exchange halting trading, especially due to a depeg, can have severe legal and regulatory implications. It can be viewed as market manipulation or a failure to maintain an orderly market, potentially leading to regulatory fines and legal action from traders who suffered losses due to the inability to manage their positions.

Regulators typically require clear, pre-disclosed protocols for trading halts and evidence that the action was taken solely to protect market integrity and not for the exchange's financial gain.