New YorkattorneyGeneral ‘BarbaraUnderwood’has mentioned3major digital currency exchanges to the state’s Departmentof FinancialServices [NYDFS] for potential violation of country’s virtual currencylaws. These exchanges are Binance, Gate.io and Kraken. This wasunconcealedin the Virtual Markets Integrity Initiative Report released recently by theworkplaceof the New York StateAttorneyGeneral [OAG].
The report details theissuesprimarilyraised by the OAGregardingthe operations of crypto exchange platforms,particularlyrelating tosecurity, internal controls, marketinspectionprotocols, andseveralrelevantcustomersandinvestorsprotection.
Earlier this year, OAG sent out a letter with a 34-point questionnaire tothirteencrypto exchanges,as well assomewithoutactive operations inNew York, asking themto requirehalfof its Virtual Markets Integrity Initiativegeared towardsfosteringgreatertransparency into their operations. Thethirteenexchangesself-addressedwere GDAX, Gemini, bitFlyer USA, Bitfinex, Bitstamp USA, Kraken, Bittrex, Poloniex, Binance, Tidex, Gate.io, itBit, and Huobi.Pro.
Mentioning further, Krakenchief executive officer‘Jeff Powell’ responded withrobustwords, stating that the OAG’s demands showed “disrespect” and “entitlement,”and thatthe letter showed Krakencreatedthe correct decisionto “get the hell outof recentNew York3yearspast.”In line withthe OAG report, Binance, Huobi, and Gate.ioadditionallydeclined to participatewithin theinitiative, stating thatthey don’tpermit anytrading within New York.
Following the report, the OAG then investigatedwhether or notin actualrealitythese platformssettle forno trades fromthestate of New York, andsupportedthe results of the investigation, itcreatedthe adviceto forward Kraken, Binance, and Gate.io to the Departmentof FinancialServices fora radicalinvestigation onattainableflouting of the state’s virtual currency laws.
In the document, the OAG bemoansthe shortageof regulation anddirectioninsidethe crypto exchangesystem, singling out Kraken for its “alarming” response to the initial letter.
An excerpt from the report reads:
“The OAGcouldn’treview the practices and procedures of non-participating platforms (Binance, Gate.io, Huobi, and Kraken)regardingartfulor abusivetrading. However, the Kraken platform’s public response isfrightening. Insayingthe company’s decisionto notparticipatewithin theInitiative, Kraken declared that market manipulation “doesn’ttouchmost crypto traders,” evenwhereasadmitting that “scams are rampant”within theindustry.”
In anotherimportantmove, the reportadditionallyissueda right awaywarning to customerstradingon the four non-participating exchanges, stating that the platformsmighthave received payment in exchange for listing digital assets,thatought toinform customers’choicestoactwith them in anymanner.