Following a new report from the New York Attorney General, the largest cryptocurrency exchange in the U.S., Coinbase, denies claims that it has been trading cryptocurrencies for its own benefit.
Claims Denied
The Office of the Attorney General in New York issued a 32-page report on September 18th which outlines the concerns over the current situation in cryptocurrency trading.
As Live Bitcoin News reported, the document highlights that further actions on behalf of cryptocurrency exchanges are needed to protect investors.
According to the file, “almost twenty percent of executed volume” on Coinbase, the San Francisco-based digital currency exchange, has been attributed to trading for its own profits. The report reads:
Such high levels of proprietary trading raise serious questions about the risks customers face on those platforms.
Quickly after the document was brought to the public, the Chief Policy Officer at Coinbase, Mike Lempres, denied the claims in an official blog post, explaining:
Coinbase does not trade for the benefit of the company on a proprietary basis. In order to provide an easy-to-use customer experience, Coinbase Consumer quotes a price and then quickly fills the order from our exchange platform (Coinbase Markets). This takes advantage of the liquidity provided by the entire Coinbase ecosystem.
Others Are Also Under the Gun
According to the aforementioned report, three cryptocurrency exchanges – Gate.io, Binance, and Kraken – were referred to the Department of Financial Services for potential violation of the existing virtual currency regulations.
The move comes after the Attorney General probed 13 cryptocurrency exchanges earlier this year and required information regarding their activity.
Out of the 13 venues, Binance, Huobi, Kraken, and Gate.io refrained from providing the requested data, claiming that they don’t operate within the state of New York.
In response, the report reads:
Customers should be aware that the platforms that refused to participate in the OAG’s Initiative (Binance, Gate.io, Huobi, and Kraken) may not disclose all order types offered to certain traders, some of which could preference those traders at the expense of others, and that the trading performance of other customers on those venues could be negatively affected as a result.
What do you think of the actions of the New York Attorney General? Don’t hesitate to let us know in the comments below!
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