As the operations of cryptocurrency exchange platforms expand, three major ones are facing regulatory scrutiny for what the authorities are describing as non ? compliance. According to the New York State Attorney General (OAG), Binance, Kraken, and Gate.io violated New York?s virtual currency regulations. The three failed to honor the launch of Virtual Markets Integrity Initiative in April by the state. They did not provide information about their practices, their internal controls and market surveillance protocols as was required.
But why did the three refuse to comply with the request from the state?
Violation of New York?s virtual currency regulations calls for serious and tough measures from the state against the victim. This is the sole reason why Barbara Underwood, the New York State Attorney General has referred the violators to the state?s Department of Financial Services (NYDFS).
However, Kraken CEO Jeff Powell has come out to explain the exact reason as to why they failed to participate in the initiative of thirteen participants. He claimed that OAG?s demands expressed some levels of disrespect. Powell further said that despite the hundreds of scams in the industry, market manipulation ?doesn?t matter to most crypto traders?.
Nonetheless, the AG seemed dissatisfied by Powell?s remarks, prompting an investigation to establish whether or not Kraken and its peers operate within New York.
An excerpt report from OAG, which read, ?The OAG could not review the practices and procedures of non-participating platforms (Binance, Gate.io, Huobi, and Kraken) concerning manipulative or abusive trading? supported the investigations.
New Yorkers deserve basic transparency and accountability when they invest
It is the mandate of every government to protect its citizens against market manipulation and fraud. That said, the NY AG office dispatched questionnaires to 13 cryptocurrency trading platforms seeking to know the policies and practices, which govern their cryptocurrency trading.
The Virtual Markets Integrity Initiative report identified limited protection of customer funds as one of the major problems facing cryptocurrency exchanges. However, Underwood is agreeable to the fact that New Yorkers have a right to basic transparency and accountability with their investments. Nonetheless, the authorities are set to roll out the necessary tools as well as measures, which will help in protecting investors against theft and fraud.