New York Attorney General Eric T. Schneiderman has begun a probe of major cryptocurrency trading platforms as part of a broader effort to protect investors and consumers.
Under the auspices of its Virtual Markets Integrity Initiative, the AG’s office has sent letters to 13 virtual currency trading platforms requesting information about their operations, internal controls and safeguards to protect customer assets. Among the recipients are Coinbase (GDAX), Gemini Trust Company; bitFlyer USA, iFinex Inc. (Bitfinex) and Bitstamp USA.
“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 Schneiderman in a statement.
He said the initiative aims to promote “the accountability and transparency in the virtual currency marketplace that investors and consumers deserve” and that enforcement agencies can use.
Cryptocurrency trading platforms currently often lack the basic protections of traditional investing platforms and can differ widely from one another, making it difficult for prospective users to evaluate their actual risks, according to Schneiderman.
(Related: SEC Halts Approvals of Cryptocurrency Funds)