US regulators question whether cryptocurrency exchanges are doing enough to prevent insider trading. To find out, the U.S. Securities and Exchange Commission started investigations.
Related: TerraUSD Dropped Below Its $1 Peg
According to a report by FOX Business, at least one large crypto exchange has received a letter requesting info about platform protections rules. A person familiar with the matter told the media they believe other exchanges also received inquiry requests.
The first letter was issued after the fall of the Terra ecosystem's UST stablecoin and governance token LUNA. Recently, in Congress, SEC Chair Gery Gensler shared his worries over writing legislation for the crypto sector, saying that could compromise regulations that govern the broader capital markets.
At the Wall Street Journal's CFO Network Summit, Gensler said the agency doesn't want to undermine the current protections in a 100 T capital market. He added that the SEC isn't looking to extend jurisdictions. However, the tokens are offered to the public and have characteristics of securities. The subject of regulations continues to be urgent, Gensler said.
Earlier, in May, Gensler said in one of his interviews he found crypto exchanges may trade against their clients. Currently, the overall crypto market stands below $1 T. The BTC price is at around $21,200. Ether trades at $1,100.