New York Attorney General Seeks More Information from Crypto Exchanges

Over the increased regulatory measures currently in the U.S, the Attorney General of New York - Eric Schneiderman is having a closer look at the crypto exchanges. Schneiderman’s office has recently sent a letter to 13 crypto exchanges requesting them to provide information on a range of topics concerning the operations of their trading platform.

The 13 crypto exchanges who have recently received the letter include Kraken, Bittrex, Poloniex, Binance, GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Tidex, Gate.io, itBit Trust Company, and Huobi.Pro.

Each of these letters comprises of a 34 point questionnaire which needs to be answered precisely in detail and submitted before the 1st of May. Many of the questions are in-depth and inquire about the specific trading procedures and policies followed by the exchanges, their KYC/AML practices and information regarding insurance and banking relationships.

The AG’s office said that once they get access to all this information, it plans to put it in a publicly accessible format for the benefits of the customers. The office has also announced a “Virtual Market Integrity Initiative” under which it plans to introduce more transparency in the crypto processes and thus preserving the integrity of the nascent stage financial markets.

“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,” said Schneiderman in a statement.

Schneiderman talked about the role that cryptocurrencies and its underpinning technologies are playing in the global financial markets while simultaneously hinting that necessary steps need to be taken to keep fraudsters away.

He 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.”

He further added: “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 letter also mentioned that the AG’s office is looking into exchanges that explicitly do not operate in New York over some regulatory concerns. The statement reads: "We are aware that certain trading platforms have formal rules barring access in New York and may not have a license to engage in virtual currency business activity in New York. Among other topics, we are asking platforms to describe their measures for restricting trading from prohibited jurisdictions.”

New York is supposedly having one of the most strict regulatory frameworks across the U.S for crypto businesses to operate who must obtain a “BitLicense” from the state’s Department of Financial Services (NYDFS).