AG Schneiderman launches inquiry into cryptocurrency exchanges

Galtero Lara
Abril 17, 2018

Attorney General Eric Schneiderman (D) on Tuesday announced the "Virtual Markets Integrity Initiative", an inquiry seeking to examine the "policies and practices of platforms" that trade in cryptocurrencies like Bitcoin.

Cryptocurrency exchanges match buyers and sellers of virtual currencies.

"With cryptocurrency on the rise, consumers in NY and across the country have a right to transparency and accountability when they invest their money", Schneiderman said in the statement. "Yet too often, consumers don't have the basic facts they need to assess the fairness, integrity and security of these trading platforms", said Schneiderman in a statement.

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The launch of Schneiderman's queries comes amid a crackdown from federal regulators responding to the rapid rise in popularity of cryptocurrency and crypto trading platforms. Among the recipients are Coinbase (GDAX), Gemini Trust Company; bitFlyer USA, iFinex Inc. (Bitfinex); (5) Bitstamp USA Inc.; (6) Payward, Inc.

Cryptocurrency trading platforms now often lack the basic protections of traditional investing platforms and can differ widely from one another, making it hard for prospective users to evaluate their actual risks, according to Schneiderman.

"Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve", he added. These are 1) ownership and control, 2) basic operation and fees, 3) trading policies and procedures, 4) outages and other suspensions of trading, 5) internal controls, and 6) privacy and money laundering.

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