New York’s attorney general launches inquiries into Crypto Exchanges
The “Virtual Markets Integrity Initiative” was announced by Attorney General Eric Schneiderman on Tuesday. Schneiderman was quoted saying, “With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms.”. As a result, letters were sent to 13 exchanges, requesting information about their “operations, use of bots, conflicts of interests, outages, and other key issues.”
As indicated by the official statement, guaranteeing that enforcement agencies, investors, and consumers have the data they have to comprehend the practices and the possible dangers on these stages is crucial, considering reports of theft of vast sums of virtual currency from customer accounts, sudden and poorly explained trading outages, potential market manipulation, and difficulties when withdrawing funds from accounts. Quite often, the stages do not have the traditional investing platforms. Also, the degree of disclosures to clients about trading rules, internal controls, and other basic practices varies from platform-to-platform, making it troublesome or impossible for new clients to assess the genuine risks of exchanging on a specific platform.
From what we know, letters were sent to the companies that operate GDAX, Gemini, bitFlyer, Binance, itBit, Gate.io, Huobi.Pro, Bitfinex, Bitstamp, Bittrex, Kraken, Tidex and Poloniex
The Initiative stems from the Attorney General’s desire protect consumers and guarantee the decency and integrity of the financial markets. Before exchanging on a new platform, investors routinely request divulgences, enabling them to survey the stage’s activities and the sufficiency of its arrangements and policies. The inquiry is also focused on key issues such as “internal controls and safeguards to protect consumer assets.” In statements, Schneiderman’s office said that the effort would also focus in part on the exchanges that do not explicitly operate in New York as a result of regulatory concerns. “We are aware that certain trading platforms have formal rules barring access in New York and may not have a license to engage in virtual currency business activity in New York. Among other topics, we are asking platforms to describe their measures for restricting trading from prohibited jurisdictions.”
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