NY Attorney General Queries Crypto Exchanges
The platforms will have to inform about their policies and practices.
Eric Schneiderman, Attorney General of the State of New York, has started an inquiry into 13 major cryptocurrency exchanges over concerns for their transparency and accountability.
The selection of crypto marketplaces, according to a statement Schneiderman published on his web site on Tuesday, includes:
· Coinbase-owned GDAX;
· Poloniex-owned Circle Internet Financial Limited;
· Bitfinex’s iFinex;
Тhe exchanges will have to reveal by May 1 details about areas such as operations and fees, trading policies, internal controls, conflicts of interest and outages
Reasons for concern
Schneiderman claims that although virtual currency investors and consumers in New York are entitled to transparency and accountability when investing their money, “too often, [they] don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms”.
Lacking extensive information on the conditions a certain exchange offers, investors may fall prey to deceptive practices and see considerable sums stolen from their customer accounts, the Attorney General underlined.
It is with these security issues in mind that Schneiderman’s office launched the Virtual Markets Integrity Initiative on Tuesday. It has the ambition to flip the current situation and inform those engaged with cryptocurrencies about potential risks, Schneiderman said.
Welcomed by crypto exchanges
Some of the trading platforms under scrutiny expressed their support for the inquiry launched by Schneiderman. Gemini CEO Tyler Winklevoss told CNBC that Gemini “applauds” Schneiderman’s focus on the crypto industry.
Bittrex said it “supports building a secure, fully-compliant environment for blockchain that encourages innovation, economic growth, and U.S. leadership in the industry”, several media reported.
Josh Hawkins, vice president of Poloniex’s parent company Circle, said to CoinDesk that all initiatives aiming to increase transparency and accountability in the digital asset sphere are welcome. In a similar tone, BitFlyer compliance director Hailey Lennon claimed transparency is “important for consumer protection”, according to media reports.
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