New York Attorney General Finds Exchanges Prone to Manipulation

New York Attorney General Finds Exchanges Prone to Manipulation

The New York State Attorney released results of their fact-finding investigation: Virtual Markets Integrity Report.

Thirteen cryptocurrency exchanges were invited to participate in the investigation by submitting voluntary information disclosures. Among the thirteen exchanges are Bitfinex, Bitstamp, Coinbase, Gemini Trust, HBUS, itBit, Poloniex, and Tidex. Four exchanges claimed they are not operating within New York, thus refused to participate. The four are Huobi Global, Binance, Gate.io, and Kraken. Claims aside, the latter three was said to probably be illegally conducting business in the city.

Barbara Underwood, NY AG, highlights the necessity of exchanges to be transparent and accountable to resident investors of New York. She further states that a number of exchanges are short of having policies that would safeguard their own integrity, fairness, and security. Basic consumer protections are absent from most exchanges. And because of this, the cryptocurrency market has a high chance of being manipulated.

Crypto exchanges have also failed to monitor, prevent, or end manipulative trading.

Virtual exchanges are found to be guilty of conflicts of interest by engaging in other businesses that would impede on the respective roles they should perform. Often, a platform functions as a digital venue where the exchange happens, and they also take the role of a broker-dealer and execute trades in lieu of the traders.

The 32 page report concludes that the Office of the Attorney General will continue on watching and protecting New Yorkers from corrupt and dishonest business practices in the rising cryptocurrency market.

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