Friday, February 3, 2023

NY Attorney General Launches Inquiry Into 13 Crypto Exchanges

NY Attorney General Launches Inquiry Into 13 Crypto Exchanges

New York State Attorney General Eric Schneiderman has just announced that his office is launching inquiries into 13 different crypto exchanges. The AG is seeking “key information on their operations, use of bots, conflicts of interest, outages, and other key issues.”

Also see: Bitcoin Price Testing Different Patterns, Trying to Break Resistance at a Tough Level

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Schneiderman: ‘We Need Transparency’

In an April 17th tweet, New York AG Eric Schneiderman declared his office is launching the “Virtual Markets Integrity Initiative.”

Scheiderman pictured.

The fact-finding inquiry, sent to 13 top cryptocurrency exchanges, was billed as an effort to “increase transparency and accountability” in order to “better inform agencies, investors, and consumers.”

Unsurprisingly, popular crypto exchanges like GDAX and Gemini have been confirmed as among the 13 recipients of the AG’s letter thus far.

Schneiderman is clearly flexing to bring these exchange’s operations into the daylight. In the very least, he’s hailing them and asking them to respond. “Too often,” Schneiderman said, “consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms.”

Please Fill Out This Questionnaire …

After his initial announcement, AG Schneiderman promptly posted a copy of the inquiry letter, formally billed a “questionnaire,” that was sent to the exchanges in question.

The subjects in the questionnaire include:

  • Ownership and Control
  • Basic Operation and Fees
  • Trading Policies and Procedures
  • Outages and Other Suspensions of Trading
  • Internal Controls
  • Privacy and Money Laundering
  • Protection Against Risks to Customer Funds
  • Written Materials

So, assuming the thirteen exchanges all choose to reply, they have some ‘splaining to do. The inquiry itself doesn’t appear to be legally binding — it’s not a subpoena, for example — but AG Schneiderman could later choose to pursue charges related to his jurisdiction in New York if any exchanges are found to have egregiously and consistently violated New York financial statutes.

We here at Bitsonline will keep you posted on the situation as it continues to develop.

What’s your take? What do you think Scheiderman’s trying to accomplish? Sound off in the comments below. 

Images via, CNBC

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