- On Tuesday, Gary Gensler, chairman of the U.S. Securities and Exchange Commission, reiterated that most digital assets fall under his agency’s purview and that venues trading them should register with the regulator. He also stated that the SEC is stepping up its enforcement activities.
- In an interview with Bloomberg News, Gensler expressed concern that crypto exchanges are not putting up sufficient barriers between different parts of their businesses, such as custody, market-making, and offering a trading platform. He believes that “commingling” services may not be in clients’ best interests.
- “Crypto’s got a lot of those challenges-- of platforms trading ahead of their customers,” Gensler stated
- “In fact, they’re trading against their customers often because they’re market-marking against their customers,” he added.
- The regulator also highlighted concerns about stablecoins, digital assets that are typically pegged to the U.S. dollar or another fiat currency. According to Gensler, the three largest stablecoins – Tether, USD Coin, and Binance USD – are all affiliated to exchanges.
- “I don’t think that’s a coincidence. Each one of the three big ones were founded by the trading platforms to facilitate trading on those platforms and potentially avoid AML and KYC,” he added, referring to anti-money laundering and know-your-customer controls.
- Binance responded to Gensler’s concerns by referring to a blog post stating that their stablecoin follows “strict guidelines and remains transparent with the user community.”
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