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A.G. Schneiderman Launches Inquiry into Cryptocurrency “Exchanges”
- austincheney 8y agoI suspect they would find some efficiently fraudulent manipulation in the complete absence of regulation, if only those exchanges were regulated enough to retain data sufficient for such inquiries.
- josu 8y ago>if only those exchanges were regulated enough to retain data sufficient for such inquiries. It wouldn't surprise if they do indeed keep all the data. After all, almost all these companies are data driven, and they have data analysis departments [0]. [0] https://www.coinbase.com/careers/797769?locale=en https://www.coinbase.com/careers/797769?locale=en
- pjc50 8y agoFortunately all the cryptocurrency in and out transactions are irrevocably documented on a public legder.
- atomical 8y agoThat doesn't even scratch the surface of illegal trading activities that are probably taking place.
- JumpCrisscross 8y ago> all the cryptocurrency in and out transactions are irrevocably documented on a public legder The blockchain doesn't (consistently) tell you who owns which wallets, nor if they're a terrorist financier or money launderer. This is besides the point that "exchange" has a specific legal meaning under the Securities Exchange Act of 1934, as amended.
- ceejayoz 8y agoOne exchange user selling to another user on the same exchange (or to themselves, i.e. a wash trade) needn't hit the public ledger.
- oarsinsync 8y agoIndeed. Only when crypto funds leave the exchange does it hit the ledger. When it’s in the exchange, it’s all in their private database.
- SirLJ 8y agoJust reading the questionnaire... This is going to be huge as in this is going to be the foundation on which the government will go after the exchanges and enforce consumer protection...
- drcode 8y agoApologies if I don't feel particularly "protected".
- SirLJ 8y agoI am fully protected against all bitcoin/token/blockchain scams, I wont touch this stuff with 10 foot pole...
- nukeop 8y agoYou're also extremely protected from ever making any profits, I'm glad people like you stay out of crypto out of fear.
- cycrutchfield 8y agoI'm glad you admit that your only interest in cryptocurrency is as a speculative vehicle. I hope your investment in digital tulip bulbs works out for you in the end.
- SirLJ 8y agoDon't you worry, I make plenty of profits in the markets, using AI trading robots, but I would never transfer 6 or 7 digits account to one of those shady exchanges, just to watch my money being stolen by crooks... Just wait few more months and the sign "This domains has been seized by the FBI" will start to pop around...
- drcode 8y agoWhy would you move such a large amount to an exchange all at once? It's much safer to move smaller amounts and move the funds to your own crypto wallet with your own private keys, that way you don't have to trust them with large sums.
- aje403 8y agoInteresting to see it's in new york - I wonder what role the big players in finance have had in lobbying for this. Nonetheless, this is great. I would bet every single crypto exchange has their hand deep in the honey pot so they deserve whatever an investigation turns up.
- microtherion 8y agoWhile lobbying may have a role to play, it's likely that NY also has more prosecutorial expertise on financial shenanigans than any other place in the US (Due to past and current misdeeds of said big players in finance).
- 21 8y agoI'm pretty sure a bunch of big finance players were involved, but at least some of them I bet were not in the way you implied. If I were a big fund or HFT shop I for sure want as much insurance as possible that my bitcoin trading funds are kept safe. Futures have too low liquidity, and don't trade on weekend when many moves happen.
- aje403 8y agoI'm not suggesting anything in particular and maybe shouldn't have used the word lobbyist and certainly don't want to sound like a conspiracy nut - but it's a good thing to keep in mind that if/when existing banks and existing exchanges become involved in trading cryptos, they'll want less competition from the vulnerable incumbents. I completely agree though. I can't even begin to imagine what the crypto exchanges are getting away with. I haven't read about about any dark pool scandals in years so I think the banks have been behaving better.
- 21 8y agoI can tell you one thing going on: legendary stop hunts. But I don't think it's the exchanges who are behind them, but other big players.
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- jMyles 8y agoI'll point out the obvious, just to get the discussion going: it's reasonable to suspect that the motivation is not consumer protection but subversion of technology which presents a challenge to the FIRE economy, which has a tragic stranglehold on NY (my home state). How will we know the difference? What will we do if indeed it's the latter?
- occamrazor 8y agoWhat is FIRE?
- ebryce 8y agoThe NY AG has actually been fairly aggressive in the past few months in investigating and reaching record settlements with financial institutions.
- lallysingh 8y agoAnd finance firms look at the crypto markets as both potential opportunities for themselves and ways to make the stock market look safe in comparison for their own customers
- Sangermaine 8y ago> it's reasonable to suspect that the motivation is not consumer protection but subversion of technology which presents a challenge to the FIRE economy No, it isn't. It's only reasonable within the tiny fantasy world of True Believers where the whole world is conspiring to keep the glory of cryptocurrency down. This is the exact same action that would be taken against any other unauthorized, unregistered securities trading. Not to mention an area which has become infamously rife with scams and fraud. Schneiderman especially has a sterling reputation with regard to pushing against the great financial powers and investigating crimes in that area.
- hapnin 8y agoToo bad they didn't question the big banks as assiduously 10-12 years ago.
- jMyles 8y agoOr now. Do we really think that HSBC-scale drug war corruption is not still happening?
- hapnin 8y agoSince no players of note went to jail in the Bailout 10 years ago, we can be reasonably sure the corruption is still entrenched. AGs know what side of their bread is buttered.
- cycrutchfield 8y agoThat’s nice. But what does that have to do with investigating cryptocurrency fraud?
- hapnin 8y agoBecause AGs are rather selective in who they'll prosecute for fraud.
- cycrutchfield 8y agoAnd that is an entirely separate issue that has nothing to do with the fraud ongoing in cryptocurrencies.
- snissn 8y agoClearly the AG of NY has motivations and interest to protect fiat / legacy banking systems, let's not pretend otherwise.
- cycrutchfield 8y ago
- drcode 8y agoBoy, if only there were some big New York banks that would love to help these exchanges smooth things over with Mr. Schneiderman in exchange for some controlling equity...
- lallysingh 8y agoCoinbase's exchange, gdax, is already partially owned by NYSE.
- JumpCrisscross 8y ago> big New York banks that would love to help these exchanges smooth things over with Mr. Schneiderman The New York Department of Financial Services and Attorney General's offices are some of the few state offices that relish going after banks. If you're a New Yorker, getting a dispute resolved with a large bank typically only involves Cc'ing one or both (if the facts are on your side).
- arisAlexis 8y agosince when one guy can crack down on global exchanges. this is why we need decentralised exchanges
- empath75 8y agoHe’s not ‘one guy’. He’s the chief prosecutor of the state that happens to be the home of one of the world’s financial capitals. If you want New York money, you need to deal with the New York legal system. Decentralized exchanges won’t help you either. Any time you interface with a nation’s currency, you’re going to deal with that nation’s government.
- arisAlexis 8y agosure but he cannot do anything to an exchange that operates from Malta or Honk Kong.