New York attorney general launches an inquiry into the practices of cryptocurrency exchange platforms. The inquiry is prompted due to an alleged lack of ”basic facts” to help consumers understand how they operate. This deeper look at both cryptocurrency practices and policies comes as a part of the ”Virtual Markets Integrity Initiative” push, intended to inform and safeguarded consumers from potential cryptocurrency perils.
The attorney general, Eric Schneiderman, set up the inquiry this past Tuesday. He argued that as the adoption of cryptocurrencies increases, it becomes increasingly important to be able to provide consumers with accurate accounts of how cryptocurrencies function, as well as to offer increased transparency and accountability.
In his statement, Schneiderman noted that the attorney general’s office has already reached out to prominent exchange platforms with written requests for disclosure on the exchanges’ operations, and any potential conflicts of interest. The leading cryptocurrency exchange Coinbase is reportedly among those who have received letters.
Schneiderman went on to highlight the inherently speculative nature of the cryptocurrency sector, and the volatility, instability, and potential risks this has led to. He also briefly touched on the fact that the cryptocurrency markets harbor hackers, thieves, market manipulators, and fraudsters. However, this should all be seen against the backdrop of the technology’s potential to facilitate a paradigm shift in how global payments are conducted and information is shared.
Nonetheless, not all authorities share the skeptic sentiments of the New York attorney general’s office, The comments from Schneiderman came as Bitcoin’s price rose significantly this past Tuesday, following comments from the boss of the International Monetary Fund, Christine Lagarde. In sharp contrast to Schneiderman’s remarks, Lagarde took to tout the future possibilities that cryptocurrency hold.
Lagarde made special note of the fact that the blockchain can help financial security make significant strides, and prevent fraud rather than facilitate it. Moreover, she observed that cheap and quick payment transactions can have far-reaching, global benefits.
She went on to liken cryptocurrencies to the dotcom era and remarked that although there have most certainly been significant structural changes since then, several of the technologies that emerged from the dotcom period has substantially impacted our lives. However, Lagarde also raised the potential issue that cryptocurrencies must first of all ”earn the confidence and support of consumers and authorities”.
The inquiry by the New York attorney general might very well lead to increased transparency in the cryptocurrency sector, which would benefit the market as a whole. It remains to be seen whether the ”Virtual Markets Integrity Initiative” has the intended effects in safeguarding consumers – as of yet, it has only put the spotlight more markedly on the cryptocurrency sphere.
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Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the cryptocurrency industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.