The exchanges may not be completely transparent, says the report of the New York Attorney General
The cryptocurrency exchange houses have been evaluated with considerable skepticism since their appearance by the government authorities of several countries. This is mainly due to the fact that they are the epicenters of transactions with digital currencies and that they are the connection between cryptocurrencies and fiduciary currency; therefore, there is a greater risk that some criminal activities will occur that end up negatively affecting users. And a recent report seems to prove that these doubts about the exchanges were reasonable.
Recently, the New York Attorney General's office published a report in which it states that cryptocurrency exchange houses are quite vulnerable to manipulation, conflicts of interest and other risks for their users.
This analysis is a consequence of the initiative launched by Eric T. Schneiderman, Attorney General of New York in April, entitled "Integrity of Virtual Markets Initiative", which aimed to provide more information to average investors on currency exchanges. digital, warning them about the risks associated with relating to these organizations and informing them about the protections that encryption platforms take.
During this process, which also sought to increase transparency, Schneiderman wrote to thirteen exchange houses, requesting information about their operations, internal controls and other key issues.
The last report, which studied the behavior of ten exchanges with headquarters in the United States and abroad, found that most do not comply with accepted methods for auditing digital assets, which results in the lack of a consistent approach and transparency to audit .
This causes that the funds of the users are retained in their accounts of the exchange house, which puts them at risk of suffering some type of computer attack.
An important aspect of the report is that "automated trading activities could also allow a single operator or group of operators to order multiple accounts simultaneously to obscure coordinated trade, in order to manipulate prices," reports CoinTelegraph.
According to the report, several of the platforms that were studied allowed their employees to make transactions from their place of work, which seriously compromises the efforts of the exchange offices so that employees do not use public data to have an advantage over other users.
Other exchanges issue their own digital currencies or receive compensation for including certain assets in the trade, which leaves in doubt the transparency of the company itself.
"Although some virtual currency platforms have taken steps to monitor the impartiality of their platforms and safeguard the integrity of their exchange, others do not," the report continued. "The platforms lack solid real-time and historical market surveillance capabilities, such as those found in traditional trading venues, to identify and stop suspicious business patterns."
This report shows that exchange houses still have a lot to learn. Although many have been concerned to be as transparent and consistent with the law as possible, others have relegated this to the background, which fuels the skepticism of government entities towards exchanges and cryptocurrencies as such.
Therefore, it is necessary that these exchange houses take the report as an alarm, to improve the failures they have and make all their operations, in the eyes of the users, as transparent as possible.