After a brutal week in the crypto industry that saw the U.S. Securities and Exchange (SEC) go after two of the largest centralized crypto exchanges in the world, the SEC chairman Gary Gensler declared that cryptocurrencies are not necessary, given the existence of fiat currencies like the U.S. dollar and euro.
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“We don’t need more digital currency. We already have digital currency. It’s called the U.S. dollar. It’s called euro. It’s called the yen. They’re all digital now,” Gensler told CNBC’s Squawk Box on Tuesday.
Gensler, who has previously called crypto “the Wild West,” was highly critical of crypto exchanges that placed customer funds at risk and took on dual functions to the detriment of customers. “These trading platforms, they call themselves exchanges, are commingling a number of functions,” Gensler said.
“In traditional finance; we don’t see the New York Stock Exchange also operating a hedge fund, making markets, and as we alleged in Binance, having a sister organization flooding the platform with transactions called ‘wash trading.’”
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In the last 48 hours, Gensler sued Binance, the world’s largest crypto exchange by trading volume, for not registering with the SEC and insufficiently keeping American customers walled off from the global parent company. “They attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes so they could keep high-value U.S. customers on their platforms,” the regulator said.
“We intend to defend our platform vigorously,” Binance said, adding that all customer funds were safe.
It also sued Coinbase, America’s largest crypto exchange, for endangering customer funds as an unlicensed securities exchange, brokerage and clearing agency.
Gensler defended the length of time it took to pursue enforcement actions against both companies, saying that the regulatory body had been working diligently to put together the pieces since the FTX collapse last year.