S.E.C. Chairman Gensler tells Congress crypto needs much more regulation

Regulated exchanges are required by law to have rules that prevent fraud and promote fairness but crypto exchanges have no such standards, Gensler said. “[Y]ou don’t know whether the order book is accurately reporting the bids and offers. You don’t know if there is front-running. You don’t know whether some of the trading that is reported is real or fake,” he said. Front running involves the misuse of customer information to trade for one’s own gain. It’s a form of insider trading.

Jeffrey Newman represents whistleblowers. Jnewman@newmanshapiro.com 978-880-4758