What Are the Regulatory Penalties for Front-Running on a Regulated Centralized Exchange?

Regulatory penalties for front-running on a regulated CEX can be severe and vary by jurisdiction. They typically include heavy financial fines levied against the individual or the exchange, disgorgement of ill-gotten gains, and potential criminal prosecution leading to imprisonment.

The exchange itself may face regulatory sanctions, loss of operating licenses, and reputational damage if its internal controls are found to be inadequate in preventing the abuse.