New York AG Slams Cryptocurrency Exchanges for Not Protecting Investors

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New York AG Slams Cryptocurrency Exchanges for Not Protecting Investors

According to the Wall Street Journal, the New York attorney general’s office has strong feelings about digital currency exchanges. This week, the agency published a report criticizing many (but not all) exchanges for missing fundamental consumer safeguards. According to the analysis, numerous platforms are vulnerable to abuse by manipulators attempting to game the system, putting customers at danger due to a lack of suitable protections.

Concerns About Fairness and Security

According to the Journal, New York Attorney General Barbara Underwood released a statement stating that “many virtual currency platforms lack the required rules and processes to assure the fairness, integrity, and security of their exchanges.” The study was the outcome of a lengthy inquiry that lasted many months. The probe was connected to the Virtual Markets Integrity Initiative initiative, which former state Attorney General Eric Schneiderman began in April of 2018. This program requested information on the activities of many exchanges; ten exchanges cooperated, but four others did not, claiming that they did not operate in New York state.

Possibility of Unlawful Operation

On the basis that they may be operating unlawfully in the state, the attorney general’s office referred three exchanges to the New York Department of Financial Services. These three exchanges—Kraken, Gate.io, and Binance—were among those that claimed they did not operate in New York. According to the Journal, these three exchangers could not be contacted for comment right away.

The gap between the accusation that these exchanges are functioning unlawfully in New York and the claim that they do not exist at all shows the regulatory complexities of the digital asset sector. Cryptocurrency exchanges, like tokens and coins, are supposed to be distinct from conventional monetary systems in many respects. Many authorities and cryptocurrency aficionados are concerned about how these exchanges fit inside the legal frameworks of various nations.

  Crypto Stability: Institutions On the Horizon?

Aside from the legality of exchange activities, the research emphasizes the impending risk of market integrity. The US Justice Department and the US Commodity Futures Trading Commission are both looking into market manipulation in the bitcoin area.

Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is very dangerous and speculative, and this article is not a suggestion by Investopedia or the writer to do so. Because every person’s circumstance is different, a knowledgeable specialist should always be contacted before making any financial choices. Investopedia makes no guarantees or warranties about the accuracy or timeliness of the information provided on this site. The author owns bitcoin and ripple as of the day this post was published.

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