Many Crypto Exchanges Have Problems, Says SEC Chairman Gary Gensler

Garry Gensler reveals that many crypto exchanges have problems. (Reuters)

JAKARTA – Chairman of the US Securities and Exchange Commission (SEC) Gary Gensler assessed that there are still a number of crypto exchanges that fail to provide protection to their consumers. Gensler made this statement in an interview with Bloomberg.

Gensler has several times urged the crypto asset industry to implement comprehensive regulations. The SEC chairman has been interested in addressing the issue since last year, he wants crypto investors to get maximum protection.

In the interview, Gensler expressed his concern about some crypto exchanges not being able to protect customers with the necessary security mechanisms.

“Cryptops face many challenges – platforms that trade in front of their customers. In fact, they often trade against their customers because they make the market against their consumers,” said Gary Gensler.

He further stated that most of the crypto assets are under the scope of the SEC. Therefore, exchanges that provide crypto trading must first register with the regulator. This is intended so that regulators can increase law enforcement efforts in the future, should things happen that are not desirable.

When discussing stablecoins, Gensler pointed out that three of the leading ones – Tether, USD Coin, and Binance USD – facilitate trading on major exchanges by “potentially” circumventing anti-money laundering (AML) rules and KYC or Know Your Customer rules.

"I don't think it's a coincidence. Each of the big three was set up by the trading platform to facilitate trading on the platform and potentially circumvent AML and KYC,” he said, quoted by CryptoPotato.

Even so, Binance itself emphasized that the BUSD stablecoin complies with applicable regulations and is transparent.