ETHERLive
ETHERLive delivers real-time price and volume data across 16+ exchanges to users in a clear and easy-to-understand package. Users can get up-to-the-second updates for each exchange/currency pair, as well as aggregated market averages for each exchange, currency, and the market as a whole. It also provides a global converted average of all the currency pairs monitored by ETHNews, converted to USD.

---

24hr ---
--%
Wednesday Oct 17th 2018
RESOURCES

The Basics

Learn the basics of Ethereum and various cryptocurrency technologies

Learn More

What is Ethereum?

Understand the underlying principles of the Ethereum Platform

Learn More

The Blockchain

Discover the revolutionizing technology known as the blockchain

Learn More
SUBMIT

Press Release

Submit a press release for consideration on ETHNews

Submit Press

Story / Dapp

Submit a story or DAPP to be considered for publication on ETHNews.

Submit Story

Explanation

Submit "Ethereum Explainer" content for consideration to be featured on ETHNews

Submit Topic
ETHNews Logo
---
--%
Home
News
Etherlive
Ether Price Analysis
Resources
Contact Us

Coinbase And Kraken Push Back On New York OAG Report

By

Tim

Prentiss

WriterETHNews.com

In a report released Tuesday, the attorney general of New York had some harsh words for cryptocurrency exchanges. Two that were called out have responded.

Earlier this week, the New York attorney general's office (OAG) released a report produced in conjunction with its Virtual Markets Integrity Initiative, which investigated cryptocurrency exchanges. The report depicted an underregulated industry. Its highly critical depiction has now been challenged by two of the exchanges mentioned: Kraken and Coinbase.

According to the report, Kraken is one of three exchanges that the OAG elected to refer to the New York Department of Financial Services for "potential violation of New York's virtual currency regulations."

The report notes that Kraken claims to not operate in New York – the exchange announced its exit from New York following the establishment of the BitLicense – but does not say whether the OAG's office was able to verify that claim.

While the report makes no claims that Kraken operates illegally, the statement of the referral to NYDFS does imply suspected wrongdoing. Or at least Kraken took it that way, tweeting

"We must, however, object to the highly unprofessional/malicious implication that because we did not respond to the voluntary information request, we *might* be operating illegally. We told you we don't operate in NY. AG trying cases in court of public opinion now?"

Kraken also sarcastically thanked New York state for providing it with inside information on its competitors' practices, while Jesse Powell, the CEO of Kraken, commenting from his personal Twitter account, compared New York state to a "abusive, controlling ex."

Unlike Kraken, Coinbase was not referred to the NYDFS for investigation. But at least one item in the report created an unflattering impression of the exchange, prompting Coinbase Chief Policy Officer Mike Lempres, to "correct the record" in a post on Medium. He claims Coinbase welcomes the OAG report, but blames the media for damaging the company's image.

Specifically, he claims that several outlets reported that nearly 20 percent of Coinbase's activity consisted of "proprietary trades." In response, he claims Coinbase "does not trade for the benefit of the company on a proprietary basis," and that the misunderstanding is because "some media coverage inaccurately characterized the report's findings."

So as not to repeat such "mischaracterizations," below is the relevant section of the report, from the section titled "Proprietary Trading by Platform Operators":

"Trading platforms that engage in proprietary trading on their own venues uniformly told the OAG that their trading desks had no informational or other trading advantage over customers.
"The OAG found that significant variation exists in the amount of trading activity attributable to those platform operators. Circle reported that it accounted for less than one percent of the executed volume on its platform Poloniex during the most recent time period reviewed. BitFlyer USA indicated that its own activity accounted for approximately ten percent of the executed volume on its platform. Another, Coinbase, disclosed that almost twenty percent of executed volume on its platform was attributable to its own trading.
"Such high levels of proprietary trading raise serious questions about the risks customers face on those platforms (emphasis added)."


Tim Prentiss

Tim Prentiss has a master’s degree in journalism from the University of Nevada, Reno. He lives in Reno with his daughter. In his spare time he writes songs and disassembles perfectly good electronic devices.

ETHNews is committed to its Editorial Policy

Like what you read? Follow us on Twitter @ETHNews_ to receive the latest New York, OAG or other Ethereum wallets and exchanges news.