Eric Schneiderman, the New York Attorney General is a man on a mission. He has asked 13 crypto exchanges to provide a detailed data on how their internal operations are run. This, he says is part of a fact-finding mission geared towards helping the government have a better understanding of their operations and thus offer corresponding rules and regulations that will govern the industry.
Regulation in the Offing
In a statement released on Tuesday, Schneiderman says that he has sent letters to the 13 exchanges with the aim of getting information about the steps they are taking to protect customer assets. This is part of an effort to regulate the industry, dubbed Virtual Markets Integrity Initiative. Schneiderman says that this program is meant to increase transparency and accountability, especially on cryptocurrency platforms.
This move by New York comes hot on the heel of the efforts being made all over the world to scrutinize cryptocurrencies, due to the fact that they do not conform to the traditional rules and regulations of investing and general finance. According to Schneiderman, this aspect makes it’s a challenge for investors to make the right evaluation in terms of the risks involved before they get into the market.
With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet, too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platform.
Response From the Targets
Following this development, Charles Cascarilla, the CEO of ItBIt, a new York-based exchange that received Schneiderman’s letter, says Schneiderman is focused on ensuring the right level of user protection considering the differences in platforms as well as their regulatory guidelines. Cascarilla reckons that by being a trusted company that conforms to the state’s banking laws, ItBit has regulatory examinations, capital and filling.
Our regulation is a lot like any other bank… Those protections in terms of customer safety, keeping of their assets, if they move assets on the exchange and making sure that you set up the exchange so that everyone is getting a transparent price, that’s not in place in other institutions, so I understand why they want to dig into this and figure out what’s going on.
Bittrex, yet another exchange that received the letter, said it was optimistic of having a good working relationship with Schneiderman to help improve accountability, transparency and security on all platforms dealing in virtual currency.
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What do you think of Scneiderman’s move to request information from exchanges? Is he justified in his reasoning? Let us know your views in the comments section below.