Electronic fair-exchange protocols have received significant attention from the research community in the recent past. In loose terms, the fair exchange problem is defined as atomically exchanging electronic items between two parties. All the known fair exchange protocols today utilize a centralized trusted third party server either actively or passively. In this paper, we propose a distributed protocol for exchange of electronic items using untrusted servers. We perform detailed security analysis and show that the protocol guarantees effectiveness and fairness with Byzantine failures of up to one third of the untrusted servers. We also give the probability of a fair exchange otherwise. Finally we discuss how to deploy the protocol to large online electronic communities and peer-to-peer systems and demonstrate its security guarantees, scalability and load balancing properties.