That might be of some interest to mention out an emerging SEC approach to determine decentralized exchange in the EtherDelta case. At the moment it seems like not defining any distinction between centralized and decentralized exchanges. Nevertheless one can find there some prones to pay attention to when trying to fix who excersises control over exchange`s operations: (1) who wrote and deployed a smart contract code? (2) who has an access key to alter a smart contract? (3) who charges the fees?
Brief overview: TLDR )
Unlike some of the most well-known cryptocurrency platforms like Coinbase and Gemini, which generally operate as custodians, EtherDelta never maintained accounts for its users’ funds. Instead, parties could transact directly with each other using the EtherDelta smart contract. Though the EtherDelta smart contract by itself is merely code that runs on the Ethereum blockchain, the Commission found that the activities taken by its creator to bring together buyers and sellers to transact through the smart contract constituted an “exchange”. (https://www.steptoeblockchainblog.com/2018/11/sec_etherdelta_order/).
" 9. EtherDelta’s business operations are defined and executed by EtherDelta’s “smart contract” that runs on the Ethereum Blockchain. The EtherDelta smart contract consists of coded functions that allow for, among other things, the trading of any Ether/ ERC20 token pair. On July 8, 2016, Coburn deployed the code for the first EtherDelta smart contract, written in the programming language Solidity, onto the Ethereum Blockchain. When it was deployed, the EtherDelta smart contract created an Ethereum Blockchain address, where the smart contract “resides.” "
footnote to par.9: " Only the person with access to the private key for the “administrator account” identified in the EtherDelta smart contract can alter the EtherDelta smart contract; this access was limited to changing the permissible fees or the address of the fee account. At all times during the Relevant Period, Coburn was the only person with access to that private key and therefore, was the only person that had the ability to alter the EtherDelta smart contract. "
“21. In posts on Reddit, Coburn explained that: “[a]t a high level, EtherDelta functions just like a normal exchange” and “[l]ike any other exchange, EtherDelta has an order book of resting orders.” However, unlike a traditional exchange, “[t]here is no ‘exchange owner’ holding your funds. Hence, [EtherDelta is] decentralized […]”
“24. […] a functional test to assess whether a trading system meets the definition of exchange … if such an organization, association, or group of persons: (1) brings together the orders for securities of multiple buyers and sellers; and (2) uses established, non-discretionary methods (whether by providing a trading facility or by setting rules) under which such orders interact with each other, and the buyers and sellers entering such orders agree to the terms of the trade.”
"26. … EtherDelta operated as a market place for bringing together the orders of multiple buyers and sellers in tokens that included securities […] "
“28. During the relevant period, Coburn founded EtherDelta, wrote and deployed the EtherDelta smart contract to the Ethereum Blockchain, and exercised complete and sole control over EtherDelta’s operations […]”
At this stage in the development of platforms trading digital assets, it would be helpful if the Divisions’ staff could be more precise in delineating between exchange and non-exchange activities, such as what types of algorithms would—and would not—constitute a trading facility, or how the exchange definition applies in a decentralized environment, in which the various functions of bringing together multiple buyers and sellers of securities are provided by distinct, unaffiliated third parties. (https://www.steptoeblockchainblog.com/2018/11/sec-orders-airfox-paragon/?utm_source=Steptoe+%26+Johnson+LLP+-+Steptoe+Blockchain+Blog&utm_campaign=1fecaebdf2-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_ce3296c335-1fecaebdf2-73421429)