New York Attorney General Launches Inquiry Into Bitcoin Exchanges

New York Attorney General Launches Inquiry Into Bitcoin Exchanges

On Tuesday, Attorney General Eric Schneiderman wrote a letter to 13 crypto exchanges announcing the "Virtual Market Integrity Initiative" saying that it was a "fact-finding inquiry into the policies and practices" of the digital currency trading platforms.

NY state Attorney General Eric Schneiderman writes in a letter that "by closing New York's double jeopardy loophole, lawmakers can ensure that no one accused of breaking New York's laws will escape accountability merely because of a strategically timed pardon".

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Suggesting the move was about focusing on "key issues" affecting consumer investors, Schneiderman's office said that it was preparing to extend its focus to exchanges that specifically choose not to operate within NY, on account of its current regulatory regime. (Kraken); Bittrex, Inc.; Circle Internet Financial Limited (Poloniex LLC); Binance Limited; Elite Way Developments LLP (; Gate Technology Incorporated (; itBit Trust Company; and Huobi Global Limited (Huobi.Pro). Those questions span from basic inquiries about ownership to anti-money laundering precautions to a request for a detailed breakdown of the fees that consumers might incur. "This might leave cryptocurrency investors in the dark in the event of "[thefts] of vast sums of virtual currency from customer accounts, sudden and poorly explained trading outages, possible market manipulation, and difficulties when withdrawing funds from accounts".

The authorities of NY have not been exactly friendly with the companies that operate cryptocurrencies exchange platforms and a month ago they presented a special tariff of electric services that aims at those companies that perform cryptocurrency mining.

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Cyber thieves are increasingly targeting virtual currencies, which have spiked in value. Buying and trading cryptocurrencies should be considered a high-risk activity.

"Legitimate entities generally like to demonstrate to their investors that their money will be protected". She argued that the state was requesting "very basic" information that should be ready on-hand for any credible platform to share with its investors. Indeed, many may be covered in your web disclosures or regulatory filings. The inquiry aims to review information on how the exchanges operate, their internal procedures, protection of customer assets and any overall conflicts of interest.

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The bureau has given the exchanges until May 1 to respond and says it will analyze and compare the different exchanges' responses and then present its results to the public. You can read the full text of the "Virtual Markets Integrity Initiative Questionnaire" here.

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