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New York AG launches inquiry into bitcoin exchanges
New York's top cop is launching an inquiry into cryptocurrency exchanges amid rising concern about the nascent digital markets.
State Attorney General Eric Schneiderman (D) on Tuesday announced the "Virtual Markets Integrity Initiative," an inquiry seeking to examine the "policies and practices of platforms" that trade in cryptocurrencies such as bitcoin.
The initiative aims to protect cryptocurrency investors and consumers by boosting the transparency and accountability of the digital trading platforms.
Schneiderman sent letters to 13 exchanges including Coinbase, Gemini Trust Company, Bitstamp USA and Huobi Global Limited to provide key information about their ownership, operations, trading policies and procedures, outages and other trading suspensions as well as details about privacy and money laundering, according to a press release on the initiative.
"With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet 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.
"Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve," he continued.
Cyber thieves are increasingly targeting virtual currencies, which have spiked in value. Those changes have raised new questions over how the government should regulate the growing industry.
Representatives from Schneiderman's office wrote in a questionnaire accompanying the letter that although virtual currencies have "captured the imagination of millions of people worldwide," they also continue to be a "highly speculative sector, featuring significant volatility, instability, and risk."