PRESS RELEASE: 4 Giant Cryptocurrency Exchanges Accused for Potential Violation for Operating Unlawfully in New York

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Recent official reports reveal that the cryptocurrency exchange is not safer enough for customers. The report revealed by New York State Attorney General on September 18 focuses on 13 major cryptocurrency exchange and their present trading mechanism.

Official security paper names the 13 major cryptocurrency exchange including Bittrex, bitFlyer USA, Inc., Bitfinex, Gemini Trust Company,Bitstamp, Ltd., Coinbase, Poloniex, Finance Limited, Gate.io, Kraken, Tidex, Binance Limited, Gate.io, Huobi Global Limited, and Kraken.

It states crypto enthusiast are facing significant risks due to following reasons;

• Trading platforms are not registered under state or federal securities or commodities laws.

• Exchanges fail to guard their platforms from common manipulation, fraud, and abuse.

• No standards for security, market surveillance protocols and internal controls available within virtual asset trading platforms.

The Virtual Markets Integrity Initiative

Essentially, there are four cryptocurrency exchanges that have been pointed as operating unlawfully in New York. There are Binance Limited , Gate.io (operated by Gate Technology Incorporated), Huobi Global Limited , and Kraken (operated by Payward, Inc.). However, the report states that few exchanges are trading the cryptocurrencies on their own exchange to increase liquidity. Few of those are employing automated and algorithmic trading. For instance, Coinbase seems operating the crypto transactions on its own trading.

As per the report, an automated trading will potentially reduce the asset availability to customers. The statement notes that;

“[When] a significant percentage of the volume in one or more assets on a venue is attributable to one source,”. “Customers face the risk that the availability of liquidity in those assets could change, without notice and at any time, including when liquidity is needed most — namely, in times of market volatility or rapid price movement.”

In addition to Coinbase, Kraken fails to respond AG’s question; official towards Kraken notes;

“In announcing the company’s decision not to participate in the Initiative”. “Kraken declared that market manipulation ‘doesn’t matter to most crypto traders,’ even while admitting that ‘scams are rampant’ in the industry.”

To avoid these manipulations, the ultimate solution could be “an independent auditing” by the trading platform itself. This is because the laws regulating cryptocurrency and its platform are not properly employed. In a nutshell, many cryptocurrency trading platforms are the major reason for manipulating the prices of leading cryptocurrency.

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