In an interview with Bloomberg News on Tuesday, SEC Chairman Gary Gensler claimed that some bitcoin exchange companies may be betting against their own clients.
Crypto exchanges, according to Gensler, are not segregating different components of their companies, such as trading, custody, and market-making. He warned that “commingling” services could be harmful to clients.
The SEC chairman also mentioned stablecoins, highlighting that the three largest stablecoins are linked to cryptocurrency exchanges. Bitfinex is a partner of Tether (USDT), Circle is a partner of USD Coin (USDC), and Binance is a partner of Binance USD (BUSD).
Stablecoins have been urged for regulation by US legislators, who believe they pose a risk to the country’s financial stability. Stablecoins’ runs have lately been cautioned about by the Federal Reserve Board and the Financial Stability Oversight Council (FSOC). Terrausd (UST), an algorithmic stablecoin, lost its peg to the US dollar earlier this week, causing its price and that of LUNA to collapse.
According to Gensler, the SEC regulates most digital assets, and crypto trading platforms should be registered with the agency. The Enforcement Division’s crypto unit has nearly doubled in size, according to the department.
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