Cryptocurrency exchanges under NYDFS scrutiny

Thursday 20 September 2018 11:55 CET | News

The attorney general has asked New York’s Department of Financial Services (NYDFS) to review whether three exchanges might be operating unlawfully in the state.

The decision came as a New York Attorney General’s office report revealed that several cryptocurrency exchanges are plagued by poor market surveillance, pervasive conflicts of interest and lack sufficient customer protections. Moreover, the study found that online platforms where virtual currencies can be bought and sold by individuals operate with lower safeguards than traditional financial markets, are vulnerable to market manipulation and put customer funds at risk.

The study also found that “trading platforms lack a consistent and transparent approach to independently auditing the virtual currency purportedly in their possession”, making it “difficult or impossible” to confirm that the exchanges are responsibly holding customer accounts.

Although some platforms police their markets for trading abuses, others do not, the report found. The attorney general’s office launched its Virtual Markets Integrity Initiative in April 2018, asking 13 platforms to voluntarily share information about their practices.

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Keywords: NYDFS, cryptocurrency, Bitcoin, US, cryptocurrency exchanges, regulation
Countries: World