The US Securities and Exchange Commission (SEC) has spread fear across the cryptocurrency sector with its lawsuits against both Binance and Coinbase cryptocurrency exchanges. While it is rumored that the number of exchanges in the SEC’s crosshairs is much larger, no clear information on this matter has been shared. Now, emerging news suggests that Crypto.com might also face similar accusations.
Crypto.com in the Spotlight over Distinctive Claims
According to the information conveyed by Financial Times, the giant cryptocurrency exchange Crypto.com may also have an internal trading team. The Financial Times reports, based on five anonymous sources, that the Singapore-based exchange possesses internal trading teams. Furthermore, it is highlighted that the exchange gives clear instructions to its employees and denies the allegation that such teams exist. Exchanges engaging in internal market-making activities have been severely criticized by the SEC in the past, and some have even faced lawsuits.
In the lawsuits filed against Coinbase and Binance exchanges, the internal market-making model was emphasized and even found its place in the case files. This situation is actually causing serious debates in the cryptocurrency sector. Cryptocurrency exchanges like BitMEX and Binance are being accused of having internal market-making teams for a long time in order to rank high on liquidity in the market. Competing exchanges indicate that this could lead to conflicts of interest, stressing that it is not ethical to open positions against the purchases and sales made by customers.
Crypto.com Denies the Allegations
Crypto.com made a statement on the subject, emphasizing that the internal market-making teams are not interacting with the exchange. People associated with the subject claimed in their statement to the FT that the said teams are not only trading on Crypto.com but also continuing to do so on other exchanges.
The Crypto.com team stated that the internal market-maker trading within the exchange is like any third-party market maker and cannot receive insider information. Crypto.com has been heavily criticized with its own cryptocurrency CRO and compared to Binance. Now, there has been an increase in the number of claims on Crypto.com, and investors are eagerly waiting for the future steps.
