Cryptographic Securities Exchanges The Harvard community has made this article openly available. Please share how this access benefits you. Your story matters

. While transparency in financial markets should enhance liquidity, its exploitation by unethical and parasitic traders discourages others from fully em-bracing disclosure of their own information. Traders exploit both the private information in upstairs markets used to trade large orders outside traditional exchanges and the public information present in exchanges’ quoted limit order books. Using homomorphic cryptographic protocols, market designers can create “partially transparent” markets in which every matched trade is provably correct and only beneficial information is revealed. In a cryptographic securities exchange, market operators can hide information to prevent its exploitation, and still prove facts about the hidden information such as bid/ask spread or market depth.