New York State Attorney General: Virtual Markets Integrity Initiative

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Below is a summary of the OAG report, produced by NY Attorney General Barbara Underwood.

Introduction

The New York State Office of the Attorney General (the “OAG”) launched the Virtual Markets Integrity Initiative to protect and inform New York residents who trade in virtual or “crypto” currency. As a medium of exchange, an investment product, a technology, and an emerging economic sector, virtual currency is complex and evolving rapidly. The OAG’s
Initiative, however, proceeds from a fundamental principle: consumers and investors deserve to understand how their financial service providers operate, protect customer funds, and ensure the integrity of transactions.

The Virtual Markets Integrity Report

The Virtual Markets Integrity Report (the “Report”) addresses areas of particular concern to the transparency, fairness, and security of virtual asset trading platforms, and highlights key policies and practices of the responding platforms. The Report includes the following sections:

Section I: Jurisdiction, Acceptance of Currencies, and Fees. This section discusses how customers sign up with trading platforms, the access controls in place at the platforms, their acceptance of fiat currency (i.e., traditional,
government-issued currency), and their fee structures.

Section II: Trading Policies And Market Fairness. This section addresses the trading rules in place at the trading platforms and the fairness for retail investors, and includes discussion of order types, the availability of credit (margin trading), policies on automated or algorithmic trading, and measures taken (if any) to address market manipulation and other abusive trading practices.

Section III: Managing Conflicts of Interest. This section addresses potential conflicts that may arise between the interests of virtual asset trading platforms, their employees, and their customers.

Section IV: Security, Insurance, And Protecting Consumer Funds. This section covers the use of independent auditing by the trading platforms, their independent security testing, and their safeguarding of customer funds through insurance and other means.

Section V: Access to Customer Funds, Suspensions, and Outages. This section discusses select issues concerning customer transactions and withdrawals, policies for suspending trading activity, including customer notification in the event of outages or scheduled maintenance.

Download the Report Here

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