The legal side of crypto is simply this... in the US, at least. Whatever is public is the legal side. This includes the Exchanges that advertise, and have not set themselves up as private membership clubs. If they were o set themselves up properly as private membership clubs first, and then advertise to join the club rather than to exchange crypto, then they would be private with their members.
Whatever is private is the lawful side. Legal and lawful are not the same thing. Once an exchange is private, they may not grow as fast as a public one, but they will have the benefit of having almost no government regulation.
What I mean is this. If your partner in a crypto exchange comes over to your house, and exchanges with you privately, it's private. Government is excluded until one of the traders makes it known what is being done. Traders who have been convicted for misusing crypto privately, have often been stood up by one of the other traders.
The thing to do if you are trading crypto is to state in the memo of the trade, that it is a private transaction. If you are doing a lot of private trades, write up paperwork that says that this is a private transaction. Make the hash of the transaction to be the separate identifying mark that shows that this trade is different than any other trade that uses the same wording in the privacy 'contract'. Get the partners of the trade to sign the paperwork.
