New York State’s Office of the Attorney General (OAG) is requesting information from 13 cryptocurrency exchanges in attempts to improve transparency and accountability and help protect digital currency investors.
The initiative is meant to complement a first-in-the-nation licensing protocol established by New York State’s Department of Financial Services that requires digital currency trading platforms and other firms engaged in digital currency business activities to receive approval to operate and follow certain regulatory requirements.
Virtual Markets Integrity Initiative
Today, New York Attorney General Eric T. Schneiderman launched the Virtual Markets Integrity Initiative, an inquiry into the policies and practices of platforms used by consumers to trade cryptocurrencies. As part of a broader effort to protect cryptocurrency investors and consumers, the OAG sent letters to 13 major trading platforms requesting key information on their operations, internal controls, and safeguards to protect customer assets.
As the questionnaire explains more thoroughly, the initiative seeks to increase transparency and accountability as it relates to the platforms retail investors rely on to trade digital currency, as well as to better inform enforcement agencies, investors, and consumers.
“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,” said Attorney General Schneiderman. “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.”
As stated in the press release, the initiative stems from the Attorney General’s duty to protect consumers and ensure the fairness and integrity of financial markets. The questionnaires sent to the 13 exchanges ask the platforms to disclose information falling within six major topic areas, including: (1) Ownership and Control, (2) Basic Operation and Fees, (3) Trading Policies and Procedures, (4) Outages and Other Suspensions of Trading, (5) Internal Controls, and (6) Privacy and Money Laundering.