The New York attorney general Eric Schneiderman has launched an inquiry into the policies of cryptocurrency exchanges in an effort to boost transparency around cryptocurrency trading and mitigate risks of investors.
Schneiderman said that the move comes as cryptocurrency trading platforms usually lack the basic market protections provided by traditional investing platforms. He also pointed out that these platforms have varying disclosure rules, which makes it difficult for users to assess risks.
The attorney general’s office has already sent letters to 13 digital currency trading firms, namely Coinbase, iFinex (Bitfinex), Bitstamp, Payward (Kraken), Gemini, bitflyer, Bittrex, Poloniex, Binance, Tidex, Gate.io, itbit, and Huobi, seeking details about their operations.
These companies will have to provide details on their ownership, operation and fees, trading policies, suspensions of trading, internal controls, as well as privacy policies.
The attorney general’s office also sought information regarding the companies’ policies on bots and the measures implemented by them to protect customer funds.
“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. 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,” Schneiderman noted.