Cryptocurrency exchanges draw New York inquiry

New York Attorney General Eric Schneiderman said Tuesday his office will conduct a “fact-finding inquiry” into 13 cryptocurrency exchanges to improve transparency and consumer safeguards for instruments including bitcoin.

Schneiderman and his team asked the 13 exchanges to disclose information related to their “operations, use of bots, conflicts of interest, outages and other key issues.” The office’s letter to each company referenced concerns about the volatility of cryptocurrencies, as well as their vulnerability to fraud.

“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,” Schneiderman said in a statement. “Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms. Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”

The 13 companies contacted by Schneiderman’s office included Coinbase, Gemini Trust, bitFlyer USA, iFinex, Bitstamp USA, Payward, Bittrex, Circle Internet Financial, Binance, Elite Way Developments, Gate Technology, itBit Trust and Huobi Global. Coinbase had not responded to FOX Business’ request for comment at the time of publication.

The price of bitcoin fell more than $120 to $7,888 on Tuesday, according to Coinbase data.

Cryptocurrencies have emerged as a way to store and transfer wealth in recent years. They are not regulated by any central government or bank and have experienced major swings in value. Bitcoin rose above $19,000 in late 2017 until plunging below $8,000 in recent days.

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