A recent Department of Justice report, suggests that the regulators will review the crypto exchanges operating in the state of New York. According to the report Binance, Huobi, and Kraken, three of the world’s largest crypto exchanges have avoided the regulators’ control. Along with a smaller crypto exchange Gate.io their cases are now being forwarded to the New York Ministry of Finance for closer examination.
Last April, the Department of Justice of New York launched a large-scale investigation for crypto exchanges. The Ministry of Justice sent a questionnaire with a total of 34 points to 13 different crypto exchanges. The subject of the investigation was based on the voluntary cooperation between crypto exchanges, like Binance, Bitfinex, Bittrex, Coinbase, and Kraken.
According to the sources, in April four of the 13 crypto exchanges refused to participate in the investigation. The trading platforms Binance, Huobi, and the smaller crypto exchange Gate.io declared that they had no business in New York. The CEO of Kraken Jeff Powell also protested the decision, stating that the Department of Justice is starting an imprudent investigation, and also added that he will move his company from New York.
After the exchanges declined to take part in the investigation, the ministry started examining whether Binance, Kraken, and Gate.io were involved in New York business. In order to find a possible break in New York’s regulations, the prosecutors transmitted the cases to the competent authorities. Binance, Kraken, and Gate.io will have to answer to the New York Ministry of Finance.
After several months of observation, Justice Minister Barbara Underwood presented the ” Virtual Markets Integrity Initiative Report ” to the public. The report shows that even the examined stock exchanges do not meet all the standards of the federal state. As a result, many crypto exchanges were vulnerable to market manipulation and had weaknesses in internal control and activity monitoring. These findings should also fuel the debate over the emergence of decentralized exchanges in the crypto community.