Gary Gensler is ratcheting up his criticism of digital-asset exchanges, arguing that some platforms are shirking rules and may be betting against their own customers.
The U.S. Securities and Exchange Commission chairman reiterated Tuesday that most digital assets fall under his agency's purview and venues trading them should register with the regulator. The SEC is also beefing up its enforcement efforts, he added.
Speaking in an interview with Bloomberg News, Mr. Gensler said he's concerned that crypto exchanges aren't putting up proper walls between different parts of their businesses such as custody, market-making, and offering a trading venue. He said the "commingling" of services may not be in clients' best interests.
"Crypto's got a lot of those challenges — of platforms trading ahead of their customers," Mr. Gensler said. "In fact, they're trading against their customers often because they're market-marking against their customers."
The securities regulator also raised issues with stablecoins, digital assets that are typically pegged to the dollar or another fiat currency. The three largest stablecoins — Tether, USD Coin, and Binance USD — are all affiliated with exchanges, Mr. Gensler said in the interview.