Schneiderman Seeks Operational Information From Crypto Platforms

Policymakers around the world are scrutinizing digital currency exchanges, the bridges between the worlds of fiat money and cryptocurrency.

NY state authorities on Tuesday said they have launched a probe into platforms that trade cryptocurrencies like bitcoin, including potential fraud and conflicts of interest.

Cryptocurrency trading platforms now often lack the basic protections of traditional investing platforms and can differ widely from one another, making it hard for prospective users to evaluate their actual risks, according to Schneiderman.

New York Attorney General Eric Schneiderman today launched what he's calling "Virtual Markets Integrity Initiative" - a fact finding inquiry to learn how cryptocurrency exchanges are running behind the scenes, by requesting "Disclosures on Their Operations, Use of Bots, Conflicts of Interest, Outages, and Other Key Issues".

In addition to Gemini, letters went to exchanges including Coinbase, bitFlyer, Bitfinex, Kraken, Binance, Gate.io, and itBit.

He is requesting information from 13 exchanges about the use of bots, outages, consumer protections, and other issues. "Our Virtual Markets Integrity Initiative sets out to change that".

"The Initiative seeks to increase transparency and accountability as it relates to the platforms retail investors rely on to trade virtual currency, and better inform enforcement agencies, investors, and consumers", wrote Simon Brandler, senior advisor & special counsel at the Office of the Attorney General, and John Castiglione, Assitant Attorney General, Investor Protection Bureau, Office of the Attorney General.

Cyber thieves are increasingly targeting virtual currencies, which have spiked in value.

New York's Attorney General has a few questions for the Winklevoss twins.

Schneiderman has begun a probe of major cryptocurrency trading platforms as part of a broader effort to protect investors and consumers.