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On April 17, 2018, the New York Attorney General’s Office (the “OAG”) joined the throng of U.S. regulators[2] vying to exercise oversight over various aspects of the cryptocurrency capital markets space. As announced in its press release[3], the OAG sent information requests (“Inquiries”) to thirteen cryptocurrency trading platforms, including some with (theoretically) no nexus to New York, as exchanges such as Kraken and Bitfinex purport to block New York users[4]. The information requests were characterized as “[a]s part of a broader effort to protect cryptocurrency investors and consumers[,]” marking the “launch” of OAG’s broader Virtual Markets Integrity Initiative.
The exchanges that received letters (the “Exchanges”), namely (1) Coinbase, Inc. (GDAX); (2) Gemini Trust Company; (3) bitFlyer USA, Inc.; (4) iFinex Inc. (Bitfinex); (5) Bitstamp USA Inc.; (6) Payward, Inc. (Kraken); (7) Bittrex, Inc.; (8) Circle Internet Financial Limited (Poloniex LLC); (9) Binance Limited; (10) Elite Way Developments LLP (Tidex.com); (11) Gate Technology Incorporated (Gate.io); (12) itBit Trust Company; and (13) Huobi Global Limited (Huobi.Pro), include entities that operate in New York and have successfully completed the BitLicense application process as well as those that have carved out[5] any New York presence and block New York consumers from their platforms.
Specifically, the Inquiries seek information on a number of topics of concern, including: ownership and control of the Exchange, operations and fee structure, trading
