Crypto exchanges are vulnerable to market manipulation, according to report

24 Sep, 2018
by Richard Allen
News
Crypto exchanges are vulnerable to market manipulation, according to report

A recent report released by the New York Attorney General Office (NYAG) indicates that the cryptocurrency trading market is susceptible to market manipulation and is failing to provide basic consumer protection, Business Insider reports.

The NYAG began a fact-finding inquiry in April, asking voluntary information disclosure from 13 of the biggest cryptocurrency exchanges, including Bitfinex, Coinbase, Gemini Trust, and Bitstamp. The report notes that a number of exchanges have failed to implement serious efforts to monitor and stop manipulative trading. Furthermore, some exchanges engage in overlapping lines of business that present serious conflicts of interest.

"New Yorkers deserve basic transparency and accountability when they invest — whether on the New York Stock Exchange or on a cryptocurrency platform," New York Attorney General Barbara Underwood said in a statement. "Yet, as our report details, many virtual currency platforms lack the necessary policies and procedures to ensure the fairness, integrity, and security of their exchanges."

The NYAG referred three platforms – Binance, Gate.io, and Kraken – to the New York Department of Financial Services for possible illicit operation within the state.

"Platforms lack robust real-time and historical market surveillance capabilities, like those found in traditional trading venues, to identify and stop suspicious trading patterns," the report said.

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