What Are the Main Regulatory Tools Used to Combat Front-Running on Centralized Exchanges?
Centralized exchanges and regulators combat front-running primarily through surveillance and enforcement. Key tools include: mandatory reporting of trading activity, rigorous market surveillance systems to detect suspicious order patterns, and rules that prohibit trading on non-public information.
Penalties for confirmed front-running can include fines, trading bans, and criminal prosecution, aiming to deter the illegal practice.