SEC Chair Gary Gensler signaled an escalation to his post-FTX crackdown on the crypto industry on Wednesday, saying that digital asset firms are in broad violation of current custodial rules meant to safeguard customers.

“The current model in the crypto field is a model that takes control, one would say ownership, of those funds, and commingles that with thousands, and often hundreds of thousands or even millions of other customer funds,” Gensler told reporters following a 4-1 commission vote to further tighten custodial rules.

“Crypto exchanges today, generally how they’re modelled, do not meet the qualified custodian standards of the current rule” set by the SEC around custody of assets in 2009, he added.

It’s the latest area where the SEC chair plans to expand scrutiny of digital asset firms, raising the regulatory and legal risks for them even more following a high-profile settlement with Kraken that ended its U.S. staking-as-a-service business and a notice to Paxos that the SEC may sue the company over its involvement in the Binance USD (BUSD) stablecoin.