Despite the fact that the cryptocurrency market is growing at an ever-increasing rate, with new cryptos and exchanges being added every day, authorities in certain countries are stepping up their efforts to regulate the new asset class and its users.
In particular, one of them is the United States Securities and Exchange Commission (SEC), whose chair Gary Gensler has recently warned the public that some digital asset exchanges may actually be betting against their own customers, as Bloomberg reported on May 10.
Indeed, Gensler told Bloomberg News that all entities trading crypto fall under the regulator’s scope and, therefore, need to register with it. Furthermore, he argued that some of those entities were evading rules, trading ahead of their customers, and:
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“In fact, they’re trading against their customers often because they’re market-marking against their customers.”
The SEC chair also criticized stablecoins, including Tether (USDT), USD Coin (USDC), and Binance USD (BUSD), over being affiliated with exchanges, which allows them to “potentially avoid AML and KYC” – anti-money laundering and know-your-customer controls.
The SEC and its history with crypto
Known for its tough stance on all things crypto, the SEC is in the middle of several lawsuits against some of the major names in the crypto and technology industry – including Ripple and Nvidia.
As a reminder, the SEC has been waging a legal battle against Ripple since December 2020, accusing it of illegally selling more than $1.3 billion worth of unregistered XRP tokens between 2013 and December 2020.
More recently, it has settled charges against technology company NVIDIA Corporation (NASDAQ: NVDA) over the failure to disclose the impact that crypto mining has had on the profits from its gaming business.
Two months ago, a group of U.S. congressmen has written to the SEC, concerned over the agency’s information-seeking process, which they considered was stifling innovation, especially where crypto startups were concerned.
At the same time, Finbold reported on the opinion of Jan van Eck, the chief executive of global investment management firm VanEck, who opined that the SEC was holding the spot Bitcoin exchange-traded fund (ETF) hostage over failure to approve the product.