Barbara Underwood is serving as attorney general of New York state. She is the first woman in New York state to serve as an attorney general. Recently, she revealed her investigation on some cryptocurrency trading platforms. In April, she initialized the investigation by asking several cryptocurrency trading platforms about their operations. The results of the investigation resulted in several outcomes. One of the outcome is the recognition of three broad areas of concerns in cryptocurrency trading.
She stated that many platforms lacked the necessary monitoring and supervising needed to prevent abusive trading. By abusive trading she meant the trading performed by the operations of bots and automatic algorithms. As abusive trading put customers at a disadvantage, so monitoring and prevention of it is declared as a major concern by her. Then she highlighted the presence of pervasive conflicts that existed within these platforms. She urged all customers to look into these conflicts. She added that customers needed to know how the platform addressed these conflicts and protected traders from potential disadvantages. Pervasive conflicts and the methodology adopted by platforms is influential in determining the safeguard of customers, hence, that’s an another concern of cryptocurrency trading.
After that, she brought up the protection of customers as an another major concern, she told that limited protection of funds was observed due to absence of auditing practices by many of the assessed trading platforms. Under the circumstances of hacking and lack of FDIC insurance, customers were highly exposed and risked as they couldn’t recover their loss.
Barbara Underwood told that the findings of the report concluded that cryptocurrency trading worked differently and many of them lacked the essential safety to carry out their operations securely and fairly. Moreover, she held three trading platforms Binance, Gate.io and Kraken of possibly operating unlawfully in New York. She said:
What we have found is that these platforms vary significantly in their operations, their internal controls, and safeguards to protect consumer assets.
Many lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges.
Barbara Underwood encourages all people to scrutinize the report published and three broad areas of concerns before getting along with the cryptocurrency trade with any cryptocurrency trading platform.