SEC's Gensler: Some Crypto Exchanges Market-marking Against Customers
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Some cryptocurrency exchange don't mind betting against their own clients as they fail to register with the US Securities and Exchange (SEC), the watchdog's head Gary Gensler told Bloomberg in an interview. He stressed that some trading platforms intentionally combine different businesses together such as market-making, trading venue and custody to bet against clients.

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"Crypto's got a lot of those challenges — of platforms trading ahead of their customers. In fact, they're trading against their customers often because they're market-marking against their customers," Gensler said.

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Gensler, who was nominated by President Biden to Chair the SEC in February 2021, also voiced concerns about ties between the largest by market capitalization stablecoins and cryptocurrency exchanges, doubting that it is coincidence:

"I don't think that’s a coincidence. Each one of the three big ones were founded by the trading platforms to facilitate trading on those platforms and potentially avoid AML and KYC."

As of press time, the stablecoin market capitalization is at $173 billion, with tether (USDT) being the largest asset, which has an $83 billion market value. In January, Gensler warned that the SEC would impose more regulatory burden on cryptocurrency exchanges if they fail to take steps in coming months to be more directly regulated. The SEC head said back then he had asked staff "to look at every way to get these platforms inside the investor protection remit."

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