Why NY Attorney General Wants a Closer Look at Crypto

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Crypto exchanges or "Exchanges" as New York Attorney General Eric T. Schneiderman's latest press release refers to them, are an integral part of the cryptocurrency ecosystem. As with any asset, an exchange is the most common point of entry and interaction for traders so they can be vulnerable to forces acting with maligned intentions. For crypto, this is doubly so because of the unregulated nature of the sector.

AG Schneiderman's office seems to recognize this and seeks to gain answers on the matter from the most prominent exchanges with letters being sent to Coinbase, Inc. (GDAX),Gemini Trust Company, bitFlyer USA, Inc., iFinex Inc. (Bitfinex), Bitstamp USA Inc., Payward, Inc. (Kraken), Bittrex, Inc., Circle Internet Financial Limited (Poloniex LLC), Binance Limited, Elite Way Developments LLP (Tidex.com), Gate Technology Incorporated (Gate.io), itBit Trust Company,and Huobi Global Limited (Huobi.Pro). Quite the list.

"BTC to da MOON!!" *

Accountability and Transparency

The Virtual Markets Integrity Initiative in an effort to protect cryptocurrency investors both in NY and more broadly. Schneiderman says, "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."

This doesn't seem unreasonable given the problems cryptocurrency exchanges have faced in the past. These are problems like theft and manipulation and have sometimes even been carried out by the exchanges themselves. While this sort of activity isn't as prevalent as it once was, with major scandals hitting the spotlight and putting exposure on the issue, it still occurs and scams abound in the cryptosphere.

As always any news of Government intervention or regulation causes a drop in price as the market reacts. This time it quickly sent Bitcoin (BTC) and other coins back to their recent support levels (7,800 USD in the case of Bitcoin). But is this bearish news? I would argue no, if anything it is bullish especially with Schneiderman behind the inquiry.

To say greater transparency would be a bad thing is disingenuous at best. When an asset like Bitcoin Cash (BCH/BCC) soar to new highs in half an hour and exchanges mysteriously blackout as the inevitable crash comes it raises some suspicion. And Schneiderman has already proven he is interested in protecting victims of bad market practices, recently announcing a 40 million dollar settlement with Harbet Management (much to the relief of NY taxpayers). Now that his sites are set on crypto exchanges, a similar attitude can be expected. This recent development indicates a further continuing trend of the US government viewing cryptocurrency as an emerging asset class.

For the full press release: https://ag.ny.gov/press-release/ag-schneiderman-launches-inquiry-cryptocurrency-exchanges

For the full text of letters sent to exchanges: https://ag.ny.gov/sites/default/files/virtual_markets_integrity_initiative_questionnaire.pdf

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I have received no additional compensation other than the Ethereum that Hade Technologies pays to produce Exclusive content

*not an actual quote as far as I know

Comments (1)

  • Jesse
  • ,  Contributor
  • 18 April 2018, 01:04 pm

This could be a problem.

   0   Reply (0)   Follow(437)  

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