SOURCE: Click here to read the full original post

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.

“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,” the attorney general said in a statement today, April 16, 2018. “Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity and security of these trading platforms.”

The letter was part of a “Virtual Markets Integrity Initiative” 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.

A Slew of Questions

In addition to the letter, the attorney general sent a three-page questionnaire to New York-based Gemini and itBit, as well as GDAX, BitFlyer 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.

Gemini, an exchange operated by the Winklevoss twins, told Bitcoin Magazine, it “applauds” the attorney general’s initiative and looks forward to submitting its responses to the questionnaire. Coinbase, itBit and BitFlyer were not immediately available for comment.

As the price of bitcoin crossed $10,000 for the first time 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 worth of NEM (XEM) in a hack; BitGrail, an Italian exchange, lost $170 million worth of Nano

SourceBitcoin Magazine - click here to read the rest of this article