New York Attorney General Barbara D. Underwood blasts cryptocurrency exchanges

In a report published on the New York Attorney General’s website, Barbara D. Underwood, the New York Attorney General, attacked cryptocurrency exchanges reckoning that they do not have any workable procedures that ensure integrity, fairness, and security.

Unlawfully acting exchanges?

Based on the results of her report, Underwood accused three specific exchanges of possibly acting unlawfully in the state of New York, including Binance, Kraken, and Gate.io in a tweet:

The Virtual Markets Integrity Initiative

According to Underwood, in most cases, malicious and manipulative trading activities go unpunished since the law enforcers find it a challenge to detect them. She noted:

The New York State Office of the Attorney General (OAG) launched the Virtual Markets Integrity Initiative to protect and inform New York residents who trade in virtual or “crypto” currency. As a medium of exchange, an investment product, a technology, and an emerging economic sector, virtual currency is complex and evolving rapidly. The OAG’s Initiative, however, proceeds from a fundamental principle: consumers and investors deserve to understand how their financial service providers operate, protect customer funds, and ensure the integrity of transactions.

Good precedence applauded

The statement, however, applauds the efforts that have been put in place by the Winklevoss twins on their Gemini Exchange, and their partnership with Nasdaq. The partnership offers more advanced market surveillance tools to the OAG that would help detect any fraudulent trading activities.

This move by the Attorney General comes on the backdrop of her quest for information about crypto exchanges in terms of their security and operations. During this quest, a total of 13 exchanges were targeted but four of these declined to provide any information, noting that they do not offer trading to New York-based users.

Attorney General’s reservations

It would be noted that most exchanges usually claim to engage in trading on their own venue to help improve their marketplace’s liquidity. However, the Attorney General is concerned about the fact that such a large portion of the trading volume may disappear instantly, especially in times of great market volatility. In such circumstances, smaller private traders may find themselves suffering heavy losses as they cannot offload their holdings due to the limited amount of buyers in the market.

Nicholas

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Nicholas is Nicholas is a prolific technology writer and cryptocurrency enthusiast. He has been writing professionally for the last 6 years, especially on emerging technology. His current focus is on blockchain technology and cryptocurrency. He has been working with several local and international clients over the years to produce dependable, well researched and updated industry content. He loves travelling and spending time with family in his free time.

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