Gary Gensler, chairman of the securities and Exchange Commission (SEC), stepped up his criticism of the digital asset exchange. He believed that some trading platforms were evading the rules and might personally participate in the relevant transactions of customers. It is understood that Gary Gensler reiterated on Tuesday that most digital asset markets belong to the jurisdiction of the institution, so the places where these assets are traded should be registered with the regulatory authority.
At the same time, he said that the SEC was also strengthening law enforcement. Gensler said he was concerned that the cryptocurrency exchange did not establish a suitable "firewall" between its different businesses, such as hosting, market making and trading. He believes that mixing various businesses together may not be in the best interests of customers.
"Cryptocurrency trading platforms are facing a variety of challenges. For example, their transactions may be prioritized over customers' transactions," Gensler said "In fact, they often trade with customers because they are also market makers (middlemen) in the market."
In addition, Gensler also mentioned the problem of stabilizing currency. It is understood that the stable currency is a digital asset linked to the US dollar or other legal tender. Gensler said that the three stable currencies - tether, USD coin and binance USD, are all associated with the transaction. "I don't think it's a coincidence," he said. "These three stable currencies are all created by trading platforms to facilitate investors to trade on these platforms and help the platform escape the review of AML (anti money laundering) and KYC (know your customers)."
It is understood that tether, the largest stable currency by market value, has a market value of US $83 billion. It has a complex relationship with the management of bitfinex, a cryptocurrency exchange. USD coin is issued by a consortium composed of several companies including coinbase (coin. US). Binance USD is linked to coin an, the world's largest cryptocurrency exchange, with a total market value of US $17 billion.
In response to Gensler's comments, coin Security said it adhered to "strict guidelines and transparency to the user community" in the issuance of stable coins, while coinbase and bitfinex did not comment. In addition, coinbase's share price plummeted after US stock market trading on Tuesday, mainly due to the company's lower than expected revenue in the first quarter. Meanwhile, the company's management warned that the trading volume in the second quarter would be lower than that in the first quarter.
It is reported that at present, the price of bitcoin has fallen by more than 50% from the historical high in early November last year. Investors' concerns about the stable currency have also intensified over the past week, as terrausd, the stable currency, decided to stop pegging to the US dollar last weekend. This means that the value of the currency loses the value support of cash or cash equivalent assets. After that, it will rely on market transactions and reserve management of the currency to maintain its value. After the announcement, the price of the currency fell. "Frankly, the chaos in the market may cool the previously overheated digital asset market," said Warner, a Democrat in Virginia.