New York Attorney General Requests Info From Numerous Cryptocurrency Exchanges in Inquiry
As of Tuesday, the New York attorney general is launching an enquiry into the numerous cryptocurrencies operating within the state’s borders.
In an announcement this morning, New York Attorney General Eric T. Schneiderman is launching the Virtual Markets Integrity Initiative, a quote “fact-finding inquiry into the policies and practices of platforms used by consumers to trade virtual or ‘crypto’ currencies like bitcoin and ether”. The reasoning behind the inquiry is to try to protect investors and consumers using the services these crypto platforms provide.
The Attorney General’s office has sent letters to thirteen trading platforms including Binance, Coinbase, and Bitfinex, amongst others. Specifically, the state is seeking to quote “increase transparency and accountability as it relates to the platforms retail investors rely on to trade virtual currency, and better inform enforcement agencies, investors, and consumers.”
Also, in the statement, there seemed to be some concern with fairness, as some investors new to the crypto scene may not know how to properly assess basic facts within the platforms on how to trade and what they are trading.
Specific topics covered in the questionaire are as follows: (1) Ownership and Control, (2) Basic Operation and Fees, (3) Trading Policies and Procedures, (4) Outages and Other Suspensions of Trading, (5) Internal Controls, and (6) Privacy and Money Laundering. A special emphasis was placed on how each of the platforms is trying to limit market manipulation, along with safeguards to protect customers from fraud and theft.
Some of the platforms named in the inquiry have already responded when asked to comment.
Gemini, led by the Winklevoss twins of Facebook fame, responded saying the company “looks forward to cooperating with and submitted our responses to the questionnaire.” Bittrex said much the same, also saying
“We look forward to working with NY Attorney General Schneiderman on our shared goal of improving transparency, accountability and security across all virtual currency trading platforms.”
Bitfinex, in contrast, offered a more neutral response: “We can confirm that Bitfinex is aware of the New York Attorney General’s inquiry regarding our operations, controls, and general user protections. Bitfinex is committed to compliance with authorities and regulators worldwide and we look forward to responding to this inquiry.”
As cryptos become more mainstream we will likely see more attempts at oversight like this. While any regulation will irk diehards, it is only natural for governments to stick regulate the exchanges as the money flows more and more.