NY attorney general asks bitcoin exchanges to explain themselves

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"The writers of our state's strict Double Jeopardy statute did not take into account the President's pardon power, and certainly did not contemplate the capricious use of that power to undermine the rule of law", said Kaminsky, a former Brooklyn federal prosecutor.

Schneiderman on Tuesday launched an inquiry into the policies and practices of 13 cryptocurrency exchanges, including Coinbase, Gemini, BitFinex, and Bitstamp. The exchange platforms play a significant role in connecting investors with the virtual currencies in the market.

The news comes at a time of increasing scrutiny for cryptocurrency exchanges, with regulators worldwide turning their focus to exchanges, as well as developing local systems for regulating cryptocurrency businesses. "Moreover, published reports indicate the sector has attracted fraudsters, market manipulators, and thieves".

Furthermore, the initiative will help enforcement agencies with the necessary information.

A majority of the crypto exchanges lack the protection facilities offered by traditional investing platforms.


One example of a Bitcoin whale is Nobuaki Kobayashi, trustee of a once dominant and now defunct Bitcoin exchange, who owns about 1.9 billion dollars' worth of Bitcoin. This makes risk assessment a complex process.

A 34-point questionnaire was attached to each letter, which requires exchanges to submit by May 1. However, retail investors hardly have such options. The exchange platforms are supposed to explain how they operate, their internal controls and how consumer's assets are protected.

(6) Privacy and Money Laundering.

Schneiderman, a Democrat in his eighth year as attorney general, has made his office a central figure in blue state challenges to Trump, tangling with the Republican president on such matters as consumer finance, the environment, immigration and the 2020 census. We will review and assess your responses, compare them with those of other platforms, and disclose certain information in a publicly accessible format.[4] As part of this disclosure, we will identify any platforms that decline to provide meaningfully complete responses.

Suggesting the move was about focusing on "key issues" affecting consumer investors, Schneiderman's office said that it was preparing to extend its focus to exchanges that specifically choose not to operate within NY, on account of its current regulatory regime.

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