New York Attorney General Launches Fact-Finding Inquiry Into Crypto Exchanges
New York Attorney General Eric Schneiderman has launched a fact-finding inquiry into the policies and practices of cryptocurrency exchanges.
Called the “Virtual Markets Integrity Initiative,” the inquiry seeks to improve transparency and accountability of major cryptocurrency trading platforms to protect cryptocurrency investors. The AG’s office has already sent letters to 13 cryptocurrency exchanges requesting key information on their operations, internal controls, and safeguards to protect customer assets. These include GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex, Gate.io, itBit Trust Company, and Huobi.Pro.
Enclosed with each letter was a questionnaire, asking the exchanges to disclose key aspects of their operations. Questions include the legal and ownership structure of the exchanges or their parent companies, how they operate, including their fee structure, and their trading policies and procedures. The exchanges were instructed to complete the questionnaire by May 1.
“Among other areas of interest, the questionnaires request that platforms describe their approach to combating suspicious trading and market manipulation; their policies on the operation of bots; their limitations on the use of and access to non-public trading information; and the safeguards they have in place to protect customer funds from theft, fraud, and other risks. The Attorney General’s office will analyze the responses, compare them across platforms, and at the conclusion of this process, present what it learned to the public,” the announcement stated.
Schneiderman said that 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.
“Consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” said Schneiderman. “Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”
In a statement, Tyler Winklevoss, CEO of Gemini, said they applaud the Attorney General’s focus on this industry and the Virtual Markets Initiative, and they look forward to cooperating with and submitting their responses to the questionnaire.
