New York Calls for more transparency in crypto exchanges, as the New York Attorney General Eric Schneiderman’s office has written a letter addressed to 13 cryptocurrency exchanges. The office has requested that the companies provide information on a number of topics that are linked to the operation of their trading platforms.
18 April, AtoZ Markets – The New York Attorney General’s office has called for cryptocurrency exchanges to become more transparent.
New York Calls for More Transparency in Crypto Exchanges
The New York Attorney General Eric Schneiderman’s office has written a letter addressed to 13 cryptocurrency exchanges. The office has requested that the companies provide information on a number of topics that are linked to the operation of their trading platforms. The letter reads:
“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.
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.”
As per the Attorney General’s office, the following 13 exchanges have received the letter: GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex, Gate.io, itBit Trust Company, and Huobi.Pro.
Crypto Exchanges’ Questionnaire
The letter also includes a 34-point questionnaire. The exchange operators are requested to complete this questionnaire by the 1st of May. Some of the questions are aiming to examine the specific policies and procedures within exchanges’ trading activities. Other questions are probing the exchanges about the information in regards to the banking relationships and insurance. There are also some questions about KYC/AML practices.
The Attorney General’s office has stated that it plans to report the results of its investigation “in a publicly accessible format” for the benefit of consumers.
The call for transparency is a key motive of the Schneiderman’s new Virtual Market Integrity Initiative. The key idea is to protect investors and preserve the integrity of cryptocurrency markets. Schneiderman writes in the letter:
“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.”
New York has appeared to have one of the most strict regulatory frameworks for crypto businesses. The crypto exchanges need to obtain a “BitLicense” from the state’s Department of Financial Services (NYDFS) in order to be able to operate on the market.
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