13 Cryptocurrency Exchanges Clamped Down To Voluntary Share Trade Information

13 Cryptocurrency Exchanges Clamped Down To Voluntary Share Trade Information

September 19, 2018 Off By Sydney Ifergan

These 13 exchanges are vulnerable to market manipulation and the funds of the customers are subject to undue risk.

Poor market surveillance, conflicting interests and sub-standard customer protection programs are all the challenges that threat the cryptocurrency exchanges.

These exchanges being places where virtual currencies are being brought and sold by the customers, the safeguards for the financial transactions are comparatively low when compared to the traditional financial markets.

Subsequent to the recent study, Barbara Underwood, Attorney General, required the New York’s Department of Financial Services (NYDFS) to explore the functioning of the three major exchanges which are operating unlawfully in the state.

The Virtual Markets Integrity Initiative was launched in April 2018.  This program launched by the Attorney General’s office required nearly 13 platforms to voluntarily share the information that is related to their trade practices in their respective exchanges.

Out of the 13 exchanges, 4 of them did not participate in the disclosure as they claimed that they are not permitting trades from within the New York State.

In response to the study that reported vulnerability of cryptocurrencies to market manipulation, Attorney General, Barbara Underwood, stated, “As our report details, many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges.”

The office of the Attorney General investigated in to whether these platforms operated from the state.  The office has referred about three of these exchanges like Binance, Kraken and Gate.io for further exploration to the NYDFS. These platforms were not reachable for further comments with regards to this exploration.

With increasing numbers of traders in “nascent asset” class booming the regulators from the US and as well as regulators from the different nations across the globe have come up with different initiatives to clamp down on cryptocurrency malpractice in the market.

Of note, two major Wall Street regulators announced a series of actions that consisted of levying fines on companies who are unlawfully involved in cryptocurrency.

In a case that was meant to prosecute fraud cases, a New York Federal judge also that a trial case can proceed in a case where charges on cryptocurrency offerings were framed based on the U.S. Securities law.

The report from the attorney general detailed on how there were “serious conflicts of interest” in the list of cryptocurrency exchanges that were scrutinized.  It is reported on how these businesses were conducting overlapping lines of business with serious conflicts of interest.  Some of these companies were trading for their own account in their own venue.  Some exchanges were charging companies in order to list the tokens. Others were issuing their own virtual currencies.

It was inferred that it was impossible for businesses to be conducting trading business by using customer investment as they promised.  From the series of overlapping businesses conduct with conflicts of interest that was uncovered during the different explorations the business proceedings were not customer friendly.

There were some businesses that police their markets for probable trading abuses, while others did not do it.  Several of these “Platforms lack robust real-time and historical market surveillance capabilities, like those found in traditional trading venues, to identify and stop suspicious trading patterns,” the report added.

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