Three cryptocurrency exchanges, including the world’s largest by trading volume, may be operating in the Empire State illegally, according to New York Attorney General Barbara Underwood.

She said Tuesday her office has referred Binance, Kraken and Gate.io to the New York Department of Financial Services for possible violation of digital currency regulations.

“New Yorkers deserve basic transparency and accountability when they invest, whether on the New York Stock Exchange or on a cryptocurrency platform,” she said in a press release accompanying a new report on the integrity of virtual markets.

What did the three exchanges do to merit this spotlight from the New York AG? According to the report, they wouldn’t answer her office’s questions.

The state official “sought voluntary participation, expecting that platforms would embrace the opportunity to provide the public with much-needed clarity regarding basic practices and functionality,” the report said. Of the 13 exchanges asked for information, four wouldn’t answer the questions, claiming they “do not allow trading from New York.”

That must’ve gotten the AG’s brain working. Thanks to a subsequent investigation, Binance, Gate.io and Kraken are now in the hot seat. What happened to the unnamed fourth company is not mentioned in the report.

Bloomberg, quoting data from CoinMarketCap, says Binance is the world’s largest crypto exchange by trading volume, Kraken is ranked 14th and Gate.io is 27th.

According to the report, the AG is concerned about the lack of protection from abusive trading practices, conflicts of interest and limited safeguarding of customer funds, Bloomberg noted.

“Virtual asset trading platforms have yet to implement serious efforts to monitor and stop abusive or manipulative trading,” the AG’s press release said. “Few platforms seriously restrict, or even monitor, the operation of ‘bots’ or automated algorithmic trading on their venue.”

ThirtyK Staff
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