Gary Gensler Finds Crypto Exchanges Trade Against Their Clients

by in Cryptocurrency News

SEC Gary Gensler

SEC Chair Gary Gensler criticized crypto exchange platforms, saying some of them have rules that may be against their customers.

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In a recent interview with Bloomberg, he said that the agency is examining most of the digital assets and trading venues and finds they should register with the regulator. Recently, the SEC revealed it is expanding its Crypto Enforcement Unit opening 20 new positions.

Gensler doubts that different parts of crypto businesses like custody, market-making and trading offerings are designed according to clients' best interests. He said that crypto is facing challenges and that trading platforms often trade against their customers because they are market-making.

Stablecoins are also a part of the SEC's circle of concern. Gesler said that large stablecoins like Tether, USDC, and BUSD are pegged to dollars and are affiliated with exchanges.

According to Gensler, it isn't a coincidence. He says each of the three coins were founded by exchange companies to facilitate trading on the platforms and avoid anti-money laundering (AML) and know-your-customer (KYC) controls. Tether was developed by the crypto exchange Bitfinex, USDC is managed by a consortium Centre that includes members from Coinbase. Centre was founded by Circle.

As for Binance USD, it was launched by the largest crypto exchange by trading volume Binance.

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After the criticism and amid the fall of prices, Binance published a blog post that says BUSD adheres to strict guidelines, and that the coin is regulated and independently audited.