On Tuesday, the New York Attorney General’s office announced that cryptocurrency exchanges need to be more transparent.
In a written letter addressed to 13 cryptocurrency exchanges, New York Attorney General Eric Schneiderman’s office appealed to companies to give information regarding their operations.
“Representing a technological advance, a medium of exchange, and an investment opportunity all at once, virtual currencies are inspiring innovators, entrepreneurs, and investors—and are fueling an increasingly diverse ecosystem of companies and applications,” the AG’s office wrote in the letter. “But virtual currency is also a highly speculative sector, featuring significant volatility, instability, and risk. Moreover, published reports indicate the sector has attracted fraudsters, market manipulators, and thieves.”
Reports from the QG’s office sent the letter to 13 exchanges and they include GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex, Gate.io, itBit Trust Company and Huobi.Pro.
A 34-point questionnaire was attached to each letter, which requires exchanges to submit by May 1. Some of the questionnaires were in-depth, requiring specific responses regarding policies and procedures in relation to trading, information about banking relationships and insurance, and KYC/AML practices. For the benefits of customers, the AG’s office hopes to publish the information “in a publicly accessible format.”
The stance of Schneiderman of his opinion regarding Virtual Market Integrity Initiative, which aims at protecting customers and maintains the integrity of these promising financial markets.
In a statement, Schneiderman noted, “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.”
Even as now, New York has one of the most rigid regulatory frameworks for cryptocurrency businesses, who are required to get a “BitLicense” from the state’s Department of Financial Services (NYDFS) to be able to operate in the state.