New York's Attorney General Is Investigating Bitcoin Exchanges (theverge.com) 43
The office of New York Attorney General Eric Schneiderman announced today that it has launched an investigation into bitcoin exchanges. He's reportedly looking into thirteen major exchanges, including Coinbase, Gemini Trust, and Bitfinex, requesting information on their operations and what measures they have in place to protect consumers. The Verge reports: "Too often, consumers don't have the basic facts they need to assess the fairness, integrity, and security of these trading platforms," Schneiderman said in a statement. His office sent detailed questionnaires to the thirteen exchanges, asking them to disclose who owns and controls them, and how their basic operation and transaction fees work. The questionnaire also asks for specific details on how exchanges might suspend trading or delay orders, indicating Schneiderman is particularly concerned with exchanges manipulating the timing of public orders. The investigation will attempt to shed more transparency on how platforms combat market manipulation attempts and suspicious trading, as well as bots, theft, and fraud. Many of the exchanges Schneiderman is targeting, such as Beijing-based Huobi, have headquarters located outside the U.S., but the attorney general has jurisdiction over any foreign business operating in New York. Coin Center's director of research Peter Van Valkenburgh tells The Verge that the new investigation might be overkill, given the existing rules already in place for bitcoin exchanges. "Far from being unregulated," he says, "these businesses must contend with state money transmission licensing laws, federal anti-money laundering law, CFTC scrutiny for commodities spot market manipulation, SEC scrutiny for securities trading (should any tokens traded be securities), and in this case, state consumer protection investigations from the several attorneys general."
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they can completely fuck over their business model by shutting down their access to process funds if they choose not to comply.
The feds can do that. The NY-AG can not.
The NY-AG's main focus is driving financial sector jobs out of NY, while building a platform for a run at the governorship.
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That's been the pattern since Spitzer
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perhaps. but it's more like someone has to step-up for the people when at the federal level (outside of mueller and his staff) it's a shitshow of total incompetence.
Finally! (Score:1)
It's been long time coming, need to protect the consumer!
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It's been long time coming, need to protect our New York based banks!
FTFY
First World Problems: 1% (Score:1)
/sarcasm Let's focus on 1% of problem and ignore the 99% that actually effect New Yorkers.
Guess they got nothing better to do.
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> AG's department is only 1 person
Show me where I said they were only 1 person?
You completely missed the point. Out of ALL the problems they _could_ be focusing on, they decide to look at a problem that is almost non-existent?!?!
How is "investigating" Exchanges that don't even do business with New York going to solve anything???
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"affect", rather than "effect".
Does this fit in the 1% or the other 99%?
The same guy who sued Exxon (Score:1)
For climate change. A case he cannot win. Yeah, thanks asshole.
Just for the record, why is every person from New York State a jackass?
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For climate change. A case he cannot win. Yeah, thanks asshole.
Just for the record, why is every person from New York State a jackass?
Its in their DNA, and it afflicks them too, if they move to NY and stay more than 5 years.
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Ivan, it's you again.
Hello.
BS (Score:4, Interesting)
"Far from being unregulated,"
That they are. They aren't required to maintain an orderly market (fill orders at best available price at that time). They're not required to post a bid/ask that they can't front run and they can buy and sell from their own account when there's better pricing available.
This allows them to manipulate the spread that a listed or transparent market automatically corrects.
The main issue is front running and not being required to maintain an orderly market. Spot sellers need to provide their own lubricant.
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Most of the exchanges have gotten been pretty smart about fraud prevention, though, and have added large disclaimers in their FAQ's to protect themselves from liability.
They often say things like:
"WE ARE NOT A BANK"
"WE CANNOT REFUND YOUR BITCOIN TRANSACTION"
"WE ARE NOT RESPONSIBLE IF YOU ENTER AN INCORRECT PAYMENT ADDRESS"
"WE ARE NOT RESPONSIBLE IF YOU GIVE YOUR PRIVATE KEY TO A THIRD PARTY SITE"
While these statements are true, I'm curious how many of them will hold up on court. They just might try to force
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They often say things like:
"WE ARE NOT A BANK"
"WE CANNOT REFUND YOUR BITCOIN TRANSACTION"
"WE ARE NOT RESPONSIBLE IF YOU ENTER AN INCORRECT PAYMENT ADDRESS"
"WE ARE NOT RESPONSIBLE IF YOU GIVE YOUR PRIVATE KEY TO A THIRD PARTY SITE"
Simply because they say these things does not make it legally so. If I say to you "I am not committing fraud", but in fact I am, your "agreement" to my statement does not absolve me.
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" If I say to you "I might be committing fraud" (that some exchanges do), and I do, my statement does not absolve me."
And likewise, being a participant (after hearing that type of disclosure) doesn't absolve you, it actually confirms your complicity of any/all fraud thereafter committed.
I have an alternative theory (Score:3)
Back on April 11th, Vice News put up a really interesting documentary titled, "Street Gangs on the Dark Web" [wordpress.com]. In the video, a reporter interviews a former drug dealer who has been using Bitcoin and the Dark Web to buy blank credit cards, reprogram them using stolen credit card data on the Dark Web, use the cards to get cash and goods, then use some of the gains to buy Bitcoin anonymously at these exchanges to continue funding his enterprise. And they also shared that a large majority of these walk-up Bitcoin exchanges are in the state of New York.
I suspect the attorney general watched the documentary as well. Because the video has mysteriously been taken down, with no mention found ask to why, and a Google search for "Vice News Street Gangs on the Dark Web" [google.com] proves the video at one point did exist, but none of the links contain the video any longer. Mod points to anyone who can find a working copy of the video.
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https://www.youtube.com/watch?... [youtube.com]
I suspect it will be removed soon although it's unlisted.
Check this link as well: https://drive.google.com/file/... [google.com]
If it gets removed from there, I have downloaded it and will make it available through a torrent file if need be.
Question (Score:2)
Are attorney generals required to be members of the bar, or are they political operatives who manage attorneys and decide on priorities?
Many companies won't do business with NY or NY'ers (Score:1)
In New Hampshire we have a lot of crypto currency vending machines and one of the more recent entrance into the market here I had the opportunity to sit down and talk with about his operations. He indicated that there were restrictions on his machines to prevent users from New York from making purchases explicitly because he didn't want to risk being tied up with NY bull shit regulations. The cost of complying with the regulations significantly increases the fees. When you start comparing the businesses whi
New York AG uses his position for political gain (Score:1)