New York Attorney General Asks US Exchanges to Prove Security

Eric Schneiderman, New York’s Attorney General (AG), has called upon 13 of America’s leading cryptocurrency exchanges to provide his office with details on how they protect their customers’ assets.

Schneiderman sent letters to exchanges such as Coinbase, Bittrex, Binance, Payward (Kraken) and Gemini Trust. Per a press release from the AG’s office, Schneiderman says exchange platforms often fail to meet the basic protection measures used by traditional investment platforms. He also claims that disclosure of rules and practices varies from company to company, meaning customers often struggle to evaluate the risks involved with using exchanges’ services.

The AG’s letter comes as part of an effort it calls the Virtual Markets Integrity Initiative. The initiative aims to “increase [exchanges’] transparency and accountability” and keep regulators, investors and customers in the loop about security, stability and customer policy matters.

Schneiderman said, per the statement, “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 trading platforms.”

In addition to American companies, East Asian exchanges operating American branches also received letters from the AG, including Japan’s BitFlyer USA and China’s Huobi.