Why Do Index Providers Often Exclude Exchanges with High Regulatory Risk?
Index providers exclude exchanges with high regulatory risk to ensure the long-term stability and reliability of the index. A sudden regulatory shutdown or intervention could cause the exchange's data feed to cease or become unreliable, severely disrupting the Index Price calculation and undermining the integrity of the derivatives market.
Glossar
Index Providers
Benchmark ⎊ Index Providers, within the cryptocurrency derivatives ecosystem, establish reference rates for pricing and valuation.
Regulatory Shutdown
Intervention ⎊ A regulatory shutdown represents a decisive intervention by governmental or financial authorities, compelling the cessation of specific market operations or platforms.
High Regulatory Risk
Framework ⎊ The escalating classification of 'High Regulatory Risk' within cryptocurrency, options trading, and financial derivatives stems from a convergence of factors including jurisdictional ambiguity, novel asset classes, and the inherent complexity of these instruments.
Index Price Calculation
Derivation ⎊ Index Price Calculation within cryptocurrency derivatives represents a methodology for establishing a fair value for an underlying asset, typically a cryptocurrency, used as a reference for perpetual contracts and other linear derivatives.