"Not regulated well" is almost guaranteed when it's an invented market. There are bound to be infinite loopholes, as people aren't good at creating markets with no missing or unintended consequences.
All markets are "invented". That's why countries have regulations about how how much of various poisons you can put into baby food. Otherwise people will sell you poisoned baby food because that is sometimes cheaper than non poisoned baby food.
Private property is a regulation. You can't even barter if the other guy has no concept of ownership, he'll just take it from you. Markets are invented by regulations.
I think at this point we're talking about laws, not regulations. You can come down off a mountain with a couple of stone tablets and that's enough to get going with barter, as barter is individuals deciding how much things are worth to them.
Conversely, the carbon market is invented: there is no natural value of the negative externality of pollution, so we invent one. And, as it's invented, it's riddled with holes.
