The U.S. Securities and Exchange Commission (SEC) has reportedly launched a probe into whether crypto exchanges are doing enough to prevent insider trading.

At least one major crypto exchange has received a letter requesting information about safeguards on the platform, according to a Tuesday report from Fox Business that cited a person with direct knowledge of the inquiry.

SEC chair Gary Gensler has previously expressed concerns about crypto exchanges offering multiple services such as market-making, custody, and offering a trading venue, that then cause conflicts of interest.

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“Crypto’s got a lot of those challenges—of platforms trading ahead of their customers,” he said in an interview with Bloomberg last month. “In fact, they’re trading against their customers often because they’re market-marking against their customers.”

Decrypt has approached the SEC for comment.

The letter to crypto exchanges cited by Fox Business was sent after last month’s collapse of Terra’s UST and LUNA.

However, it is not yet clear whether the inquiry is being led by the Office of Compliance Inspections and Examinations, which frequently looks into areas of potential interest, or the SEC’s enforcement division. If it is being conducted by the latter, this would suggest the regulator is concerned about the possibility of serious violations.

The SEC and crypto

The SEC has been active in its scrutiny of the crypto space in recent months. Most recently the regulator was reported to be looking into whether Terraform Labs, the firm behind UST and LUNA, violated investor protection rules in the way it marketed the tokens.

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Reports have also suggested that federal investigators are looking into potential violations in Binance’s 2017 initial coin offering.

However, the SEC could be set to lose oversight of the sector if a new bill passes through the Senate, which aims to hand over authority to the Commodity Futures Trading Commission.

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