Published: Wed, April 18, 2018
Finance | By Loren Pratt

Binance, Bitfinex and More: NY Launches Inquiry Into Crypto Exchanges

Binance, Bitfinex and More: NY Launches Inquiry Into Crypto Exchanges

As longtime readers know, NY pioneered the BitLicense, a business license for virtual currency activities.

The Attorney General's office has requested the questionnaire which can be viewed in full here, be returned completed by the exchanges by May 1st.

The attorney general is requesting information on the platforms' operations, internal controls, and safeguards to protect customer assets, according to a statement from Schneiderman's office.

Sunlight as disinfectant: "Too often, consumers don't have the basic facts they need to assess the fairness, integrity, and security of these trading platforms", Schneiderman said in a statement.

The AG has sent letters to 13 major virtual currency trading platforms, asking for information about their operations, internal controls, and consumer protections. (Kraken), Bittrex, Inc., Circle Internet Financial Limited (Poloniex LLC), Binance Limited, Elite Way Developments LLP (, Gate Technology Incorporated (, itBit Trust Company, and Huobi Global Limited (Huobi.Pro).

Attorney General Eric Schneiderman announced the "Virtual Markets Integrity Initiative" on Tuesday, saying it was "a fact-finding inquiry into the policies and practices" of cryptocurrency trading platforms.

US and worldwide regulators have increasingly expressed concern about the need to beef up oversight as use of virtual currencies has grown quickly.

"In reality, investors transacting on these trading platforms do not receive numerous market protections that they would when transacting through broker-dealers on registered exchanges or alternative trading systems, such as best execution, prohibitions on front-running, short sale restrictions, and custody and capital requirements", he said.

Crypto exchanges have been prone to hacks and outages and do not subscribe to the same regulatory mandates as well-established equity exchanges such as the New York Stock Exchange and Nasdaq.

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