The office of the New York Attorney General (AG) recently published a report "Virtual Markets Integrity Initiative", which names the main defects of cryptocurrency exchanges. Thus, the report highlights the lack of safeguards against abuse, uncertain listing rules and several areas of businesses that cause controversy. The department’s report caused a strong reaction from market participants.
To begin with, the prosecutor's office announced an initiative to ensure the integrity of virtual markets in April this year. The office sent requests to the 13 crypto exchanges to learn more about their practices and procedures and to identify risks for investors.
Coinbase
San Francisco-based cryptocurrency exchange Coinbase rejected prosecutors' allegations of trading in the interests of the company. "Coinbase does not engage in proprietary trading," the team wrote in their official Twitter.
The prosecutor's report states: "Coinbase, disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading."
"The volume figure stated in the report has been misreported in the media as “self-trading,” which is inaccurate. The figure represents customer-driven volume via Coinbase Consumer. Coinbase does not operate a proprietary trading desk, nor does it undertake market making actions," the company stated in its blog, stressing that it is executing the transactions on behalf of Coinbase consumers, not on their own.
CME Group
The report has also indirectly touched upon the CME Group. The prosecutor's office said that the Bitstamp and itBit sites, with which CME operates, do not have an official policy to combat market manipulations. And the third platform, Kraken, with which the company also cooperates, refused to answer questions from the prosecutor's office.
The chairman and CEO of CME Group Terry Duffy said that some statements of the prosecutor's office cause him anxiety. The company is now scrutinizing the department's report carefully and has not yet decided how it will operate in the future.
Vitalik Buterin
Following the discussion of the recent report on the problems of crypto exchanges, Ethereum co-founder Vitalik Buterin supported the desire of the regulatory body to discuss the situation in public space. At the same time, according to the Ethereum creator, the report is focused on regulatory issues and legislation - although it was possible to pay attention to the exchange process on each crypto platform.
Kraken
Cryptocurrency exchange Kraken has also responded to the report. In its official Twitter account, the platform thanked the taxpayers of New York for the research funding.
Nevertheless, the company opposed the "highly unprofessional/malicious implication" that the platform did not respond to the prosecutor's request and could act illegally. The company reminded that it does not operate in New York.
The CEO of Kraken Jesse Powell was not shy using expressions and compared the prosecutor's office to a girl who pursues her ex-boyfriend after breaking up. Note that Kraken left New York three years ago.
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