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I'm trying to determine the major differences between how a typical bitcoin trading platform operates and how a traditional stocks trading platform operates.

Of biggest concern right now is some bitcoin exchanges have the tendency to pause trading (for hours sometimes) at pivotal movement moments in the market. They always blame some technical issue. It's not evidence of wrongdoing, but it is suspicious. They may be committing fraud of some kind, or simply need time to generate some temporary solvency.

This made me think that I've never seen such a thing happen in my experience with online stocks trading platforms. I've seen trading halts, but they were always some reason originating outside of the platform, coming from the exchange (e.g. DOW or NASDAQ) or the the SEC itself.

So I wondered, is there a minimum level of service a stocks trading platform must legally provide? Can a platform, for any reason, pause all its services? If yes, can it pause a segment of its services, such as specific exchanges or even a specific stock? Naturally, they may suffer the wrath of upset customers if this is legal, but I'm only concerned if it is legal in the first place.

This leads to further questions, which answers may neglect if it's too much for a single answer. For example, with the SEC categorizing bitcoin like a commodity, is this a false comparison? Should trading conventions and regulations of bitcoin be compared to gold or other commodities instead? I have no experience with that kind of trading. If bitcoin and stocks platforms are similar, what has prevented the SEC from intervening in at least the American owned and operated exchanges?

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    I'm sorry if this seems more a law question instead of a personal finance question. As an effort in managing personal finances, I find that knowing where legal protections begin and end is pretty important. – fredsbend Feb 1 '18 at 20:19
  • It depends on the brokerage and what sort of clearing services they offer. Interactive Brokers, one of the more popular brokers, has a business continuity plan that basically says too bad so sad if you incur any financial losses while the platform is down. Source (top of page 2): gdcdyn.interactivebrokers.com/Universal/servlet/… – HK47 Feb 1 '18 at 22:06
  • @HK47 So, there's no legal requirements for minimum level of service? – fredsbend Feb 1 '18 at 22:07
  • It does not seem like they have any legal obligation, like say FDIC insured banks do. The language in that document makes it sound like a "best efforts" sort of deal. If the SEC or CFTC suspected fraudulent activity, they very well could shut down the brokerage. It would be extreme, but not impossible. Point 6 in this document hits it on the head: gdcdyn.interactivebrokers.com/Universal/servlet/… – HK47 Feb 1 '18 at 22:09
  • There is no legal obligation to provide a minimum SLA. Indeed many retail brokerages have a clause in their terms of service that basically says, "our platform can be down at any time, you might lose a lot of money because you weren't able to execute orders, and you agree to assume this risk." – TainToTain Feb 22 at 1:15

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