Remarkable statement from an important person that crypto platforms do not work for the customers, but against them.
US Securities and Exchange Commission (SEC) chairman Gary Gensler says cryptocurrency exchanges “often trade against their clients because they are market markers against their clients.” He has expressed concern about the “mixing” of crypto trading platform services.
Crypto Platforms Trading Against Clients
Gary Gensler said in an interview this week of Bloomberg News that some cryptocurrency exchange platforms may be betting against their own clients. Gensler expressed concern that crypto exchanges do not separate the different parts of their business, such as trading, custody and market making. He warned that the “mixing” of services could harm customers.
Noting that the problem of “platforms trading for their clients” is widespread in the crypto space, the chairman said. In fact, they often trade against their clients because they are marketing their clients. The SEC chief also raised issues with stablecoins, stressing that the three largest stablecoins are affiliated with crypto exchanges. Tether (USDT) is pegged to Bitfinex, USD Coin (USDC) is pegged to Circle and Binance USD (BUSD) is pegged to Binance.
Is legislation the solution? Many people think not. But US lawmakers have called for the regulation of stablecoins. Citing that they pose risks to the country’s financial stability. The ‘regular’ currencies must also be subject to (more) supervision. The current crypto crash is rekindling the debate. The discussion is about whether more rules should not be introduced and whether it should be faster. These thoughts are also present in Europe, but we often follow America.