What Is the Consequence of a CEX Losing Its Operating License Due to Market Manipulation?

Losing an operating license is the most severe regulatory consequence for a CEX, leading to its effective shutdown in that jurisdiction. The exchange would be forced to cease operations, liquidate assets, and return funds to clients, causing massive financial loss and reputational damage.

This action is typically taken after repeated or egregious violations, such as systemic failure to prevent illegal market manipulation like front-running or insider trading.