New York’s Attorney General Wants to Know What the Winklevoss Twins Are Doing to Protect Cryptocurrency Customers
New York’s attorney general has launched an initial probe into 13 cryptocurrency exchanges, one of them being the Gemini exchange that’s run by the Winklevoss twins, Cameron and Tyler. Coinbase, the U.S.’s biggest cryptocurrency exchange, was also included.
Attorney General Eric Schneiderman said Tuesday that he wants to “improve transparency and accountability” in the sector. The probe is a fact-finding mission rather than a crackdown, with Schneiderman’s office asking the exchanges to provide details on their operations, internal controls and safeguards.
“Too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” said Schneiderman in a statement. “Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”
The “Winklevii”—still best known for suing Mark Zuckerberg with the claim that he stole the idea for Facebook from them—said they looked forward to cooperating with Schneiderman.
“We continue to embrace thoughtful regulation and collaboration on our mission to help build the future of money,” they said in a statement quoted by the New York Post.
The Gemini proprietors last month proposed the creation of a new self-regulatory body for the cryptocurrency sector, called the Virtual Commodity Association. Commodity Futures Trading Commission (CFTC) Commissioner Brian Quintenz had previously called for the creation of such a body and praised the Winklevoss plan.
The CFTC and the Securities and Exchange Commission (SEC) rely on self-regulatory organizations to help them do their work.
Schneiderman, meanwhile, is also concerned about consumer protection and ensuring fairness in financial markets. He wants to make sure that cryptocurrency investors understand what they’re getting into, when they buy and trade virtual coins such as Bitcoin and Ether.
Also on Tuesday, someone apparently dumped 6,500 Bitcoins, knocking the cryptocurrency’s value by $200. However, that only seems to have happened four hours after Schneiderman’s announcement, so there may be no link.
This article was updated to clarify that only one CFTC commissioner had praised the Winklevoss self-regulation plan, rather than whole CFTC.