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Apr 17, 2018

Investopedia | NY Attorney General Launches Inquiry into Cryptocurrency Exchanges, April 17,2018.

NY Attorney General Launches Inquiry into Cryptocurrency Exchanges

Caleb Silver

New York Attorney General Eric Schneiderman announced today that his office will be looking into the operations, conflicts of interest and other key issues impacting cryptocurrency investors and consumers through a formal inquiry. It's called the "Virtual Markets Integrity Initiative," which per the official AG office press release is designed to "...Improve Transparency and Accountability of Major Cryptocurrency Trading Platforms to Protect Virtual Currency Investors." Schneiderman's office is sending letters to 13 virtual currency trading platforms requesting disclosure on their operations in what it is a calling a 'fact finding inquiry'.
“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,” said Attorney General Schneiderman in the release.  Given that cryptocurrency platforms  or 'exchanges', as they are known, are the entry point for investors to buy, sell or trade cryptocurrencies like Bitcoin, Schneiderman's office is concerned about the amount of sensitive personal information they hold and the vast amount of both virtual and government issued or fiat currency that runs through them.
This move comes at a time when cryptocurrencies are increasingly coming under the lens of regulators, and corporate giants like Facebook are facing tough questions about user data privacy. (See also: Bitcoin Price Sinks Amid SEC Cryptocurrency Investigation)
The Investor Protection Bureau of the Office of the Attorney General sent letters of inquiry to the following platforms:
  1. Coinbase, Inc.
  2. Gemini Trust Company
  3. bitFlyer USA, Inc.
  4. iFinex Inc. (Bitfinex)
  5. Bitstamp USA Inc.
  6. Payward, Inc. (Kraken)
  7. Bittrex, Inc.
  8. Circle Internet Financial Limited (Poloniex, LLC)
  9. Binance Limited
  10. Elite Way Developments LLP (
  11. Gate Technology Inc. (
  12. itBit Trust Company
  13. Huobi Global Limited (Huobi.Pro)
The Attorney General's Office is asking these exchanges to fill out the a questionnaire to address 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, among other topics.
While the New York Attorney General's office is known for prosecuting financial crimes, the inquiry announced today is just a fact-finding mission, and is not a formal investigation. But given reports of the theft of millions of dollars from several crypto exchanges, trading outages, possible market manipulation and difficulties some consumers have experienced withdrawing funds from their accounts, Schneiderman's office is trying to provide "average investors" with a better understanding of the risks and protections associated with these exchanges.

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