New York's Bad News on Crypto Exchanges Could be Good News

W

hen life gives you lemons, make lemonade. Accent the positive. Yeah, yeah yeah. Lets take a big pivot here. Last week the New York attorney general's office issued a report that shed light on a whole lot of practices going on at the biggest cryptocurrency exchanges. The report wasn't pretty and called into question the integrity, security and fairness of how the exchanges handle customer's activities. But remember, if a government agency looks into ANYTHING it will find something......usually bad. So, the good? It will probably put exchanges on notice to clean up any perceived negatives which will result in more overall public confidence in the the exchanges. Here's a great report explaining all the details.

(Bill Taylor/Fintek Capital)

"A fight is brewing over the future of the cryptocurrency exchange, and its outcome will figure prominently in how the industry evolves. On one side are the purists, who believe that crypto exchanges—the on- and off-ramps between the world of crypto and the traditional financial system—can and should remain free of government meddling. On the other side are government regulators, charged with protecting investors from fraud.

This week the New York attorney general’s office landed a powerful blow in favor of the regulators, with a new report that illuminates the shadowy inner workings of 10 popular cryptocurrency exchanges. The report could dial up pressure on the exchanges to move toward greater transparency and better consumer protection. Like it or not, that could be a boon for the cryptocurrency industry—at least, if mainstream adoption is the goal.

In April, the AG’s office asked 13 popular exchanges to respond to a detailed questionnaire covering a wide range of topics, from trading fees to anti-money-laundering policies to methods for keeping customer assets secure. Ten chose to comply, and the newly released analysis of their responses paints a bleak picture. In particular, Attorney General Barbara Underwood lamented the widespread lack of “necessary policies and procedures to ensure the fairness, integrity, and security” of exchanges..."