Gary Gensler, head of the Securities and Exchange Commission (SEC), reiterated that most altcoin projects are securities, saying that exchanges may engage in transactions that may be against the interests of their clients.
Gary Gensler says cryptocurrency exchanges are ‘market makers to their customers’
The SEC chief warns that the lack of distinction between services such as custody, market making and providing a trading platform leaves customers vulnerable. Speaking to Bloomberg on Tuesday, Gensler included statements targeting cryptocurrency exchanges alongside the topic of regulation of cryptocurrencies:
Crypto has many of the challenges of platforms trading in front of their customers. In fact, they often trade against their customers because they are trading market share against their customers.
SEC minister warns of these altcoin projects
As we have covered in the news of Kriptokoin.com, US Treasury Secretary Janet Yellen, in her speech to the Banking and Money Former Committee on Tuesday He drew attention to the extreme volatility of Terra (UST) and emphasized the need for a regulatory framework. SEC chairman Gary Gensler emphasizes that some stablecoins such as Binance, USD Coin and Tether are closely linked to exchanges:
I don’t think this is a coincidence. All 3 major stablecoins were created by exchanges. Each and every one of the platform was created by exchanges to facilitate trading on these platforms and potentially avoid AML and KYC (money laundering and authentication).
To recall, Gensler previously warned about crypto exchanges trading before customers’ orders. There was no response to Gensler’s comments above from Coinbase (Circle – USDC) and Bitfinex (Tether). Binance, on the other hand, stated that the (BUSD) exchange has strict rules and information is shared transparently. Statement:
SEC’s focus in 2022 is cryptocurrency
In January, Gensler said that cryptocurrency exchanges should face further scrutiny from the financial watchdog as they need to directly regulate such companies to provide greater protection to investors:
I asked them to look for every possible way to get it under protection. If exchanges do not enter the regulated space, it will be another year in which the public is vulnerable.