A top U.S. financial regulator is joining the list of people concerned that lightly policed cryptocurrency markets make easy targets for manipulators.
Warding off market cheaters in digital currencies is among the Securities and Exchange Commission’s major concerns as it monitors those assets, according to Brett Redfearn, head of the regulator’s Division of Trading and Markets.
Few police officers are currently on the beat watching for rigging, in part because regulators are still trying to work out who’s responsible for what, and because it’s not clear they can do much until the exchanges register with them.
Cameron and Tyler Winklevoss, who run the Gemini exchange for Bitcoin and Ether, recently proposed that the industry start self-policing to help fill in the vacuum.
U.S. regulators are grappling with the “Wild West” of trading digital assets, including Bitcoin, Ether and digital tokens. The SEC is examining a range of businesses in the nascent industry, including initial coin offerings — or digital token sales that allow buyers to take a stake in companies — as well as cryptocurrency- focused hedge funds and trading venues.