Blockchain Legal Resource: New York Attorney General Reports On Crypto Exchanges

A new report from the New York Attorney General ("NYAG") summarizes the findings of its recent Virtual Markets Integrity Initiative (the "Initiative"). The NYAG concluded that crypto trading platforms vary significantly in their risk management strategies and in the ways they fulfill customer responsibilities. The NYAG also identified three broad areas of concern: (1) potential conflicts of interest, (2) lack of serious efforts to impede abusive trading activity, and (3) limited protections for customer funds.

The Initiative began in April 2018 with a series of voluntary requests for information provided to major virtual currency trading platforms. Nine of the 13 firms that the NYAG contacted provided responses, and seven of them currently hold licenses from the New York Department of Financial Services ("NYDFS"). Each of the four firms that chose not to respond contended it did no business in New York state, but the NYAG nonetheless made enforcement referrals on