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."
Read more of this story at Slashdot.