New York’s Attorney General Wants Cryptocurrency Exchanges To ‘Be More Transparent’

“All cryptocurrency exchanges need to focus on transparency” is what the New York Attorney General’s office said this Tuesday. In a letter addressed to 13 cryptocurrency exchanges, the New York Attorney General Eric Schneiderman’s office requested that companies should provide information on a range of topics related to the operation of their trading platforms.

The letter also said:

“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.”

The cryptocurrency exchanges in New York that received this letter include the names of: Binance, Bittrex, Poloniex, GDAX, Gemini, Bitfinex, bitFlyer USA, Bitstamp USA, Tidex, Gate.io, itBit Trust Company, Kraken and Huobi.Pro.

Each letter also included a 34-point questionnaire which the exchange operators were instructed to complete in full before May 1st. In this questionnaire, there are questions that are quite in-depth – focusing on specific policies and procedures related to trading as well as information about banking relationship and insurance.

The push for transparency at this point is a key component of the new Virtual Market Integrity Initiative which is focused on protecting investors and preserving the integrity of the nascent financial markets. As Eric Schneiderman. the NY Attorney General states in it:

“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 is already known to the world for having some of the most stringent regulatory frameworks in the crypto business – where every crypto exchange needs to obtain a special “BitLicense” from the state’s Department of Financial Services (NYFDS) before it can operate. However, this is only done in good intention in order to control every exchange before it can operate in the state.