{"id":22257,"date":"2018-04-17T20:36:31","date_gmt":"2018-04-17T20:36:31","guid":{"rendered":"http:\/\/ci027cfe7a50022697"},"modified":"2018-04-17T20:36:31","modified_gmt":"2018-04-17T20:36:31","slug":"new-york-attorney-general-launches-inquiry-cryptocurrency-exchanges","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/new-york-attorney-general-launches-inquiry-cryptocurrency-exchanges","title":{"rendered":"New York Attorney General Launches Inquiry Into Cryptocurrency Exchanges"},"content":{"rendered":"
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As part of an effort to protect cryptocurrency investors and bring greater transparency into how cryptocurrency exchanges operate, New York Attorney General Eric Schneiderman has sent letters to 13 virtual currency exchanges requesting they disclose key information about their operations.<\/p>\n

\u201cWith cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money,\u201d the attorney general said in a statement<\/a> today, April 16, 2018. \u201cYet too often, consumers don\u2019t have the basic facts they need to assess the fairness, integrity and security of these trading platforms.\u201d <\/p>\n

The letter was part of a \u201cVirtual Markets Integrity Initiative\u201d launched by Schneiderman to shine a light on the policies and practices of platforms used by consumers to trade virtual currencies and initial coin offering (ICO) tokens. <\/p>\n

A Slew of Questions<\/h3>\n

In addition to the letter, the attorney general sent a three-page questionnaire<\/a> to Coinbase, Gemini, Bitfinex, Poloniex and nine other exchanges asking them to disclose, among other things, information such as what banks they use, how they hold customer funds, what fees they charge, how they come up with those fees, how they move funds around, who has access to the order books, and the scope of third-party audits.<\/p>\n

Gemini, an exchange operated by the Winklevoss twins, told Bitcoin Magazine<\/em>, it \u201capplauds\u201d the attorney general\u2019s initiative and looks forward to submitting its responses to the questionnaire.<\/p>\n

As the price of bitcoin crossed $10,000 for the first time<\/a> in November 2017, reaching a peak of over $19,700 a few weeks later, a rush of new traders began entering the market. But, as many have learned the hard way, putting funds on exchanges comes with its own set of risks. Outside of the U.S., this year alone, Coincheck in Japan lost $530 million<\/a> worth of NEM (XEM) in a hack; BitGrail, an Italian exchange, lost $170 million<\/a> worth of Nano (XRB); and Coinsecure, an exchange in India lost $3.5 million<\/a> in bitcoin (BTC). <\/p>\n

Tough Times Ahead<\/h3>\n

In the U.S., cryptocurrency regulation is becoming a tough web to untangle for companies trying to do business in the space. Not only do cryptocurrency businesses and virtual exchanges have to deal with federal regulators like the Securities and Exchange Commission, Financial Crimes Enforcement Network and the Commodity Futures Trading Commission, but they also have to contend with regulators in each of the 50 states.<\/p>\n

Stephen Palley, a lawyer in Washington D.C., known for his work in the crypto space, says he is not surprised to learn of the New York attorney general\u2019s initiative. At the same time, he views it as a grim sign of what is to come. \u201cThis is just the start. There will be a major onslaught. It will shut down or shut out a bunch of exchanges from the U.S.,\u201d he told Bitcoin Magazine<\/em>. <\/p>\n

In a tweet<\/a>, Palley referred to Schneiderman as an \u201cactivist\u201d and noted, \u201cBeing in his crosshairs isn’t a great thing.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

New York Attorney General Eric Schneiderman has sent letters to 13 cryptocurrency exchanges requesting they disclose key information about their operations.<\/p>\n","protected":false},"author":3488,"featured_media":22258,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[298,3240,2924,219],"class_list":["post-22257","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-cryptocurrency","tag-icos","tag-new-york","tag-regulation"],"author_data":{"id":3488,"name":"Amy Castor","nicename":"amy-castor","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/amy-castor-promo-image-96x96.jpg"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/new-york-attorney-general-launches-inquiry-into-cryptocurrency-exchanges.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/22257","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/3488"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=22257"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/22257\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/22258"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=22257"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=22257"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=22257"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}