Category Archives: ItBit

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New York Report Points to Improvement Areas for Crypto Exchanges

The New York Attorney General’s office published a report this week that investigates the practices of cryptocurrency exchanges in the state.

It was undertaken on the basis of protecting and informing residents, with evidence conclusively pointing to areas that exchanges need to improve in order to ”ensure the fairness, integrity, and security of their exchanges”.

The ten exchanges that chose to participate in the Attorney General’s report include Bitfinex, bitFlyer USA, Bitstamp, Bittrex, Coinbase, Gemini, itBit, Poloniex, HBUS and Tidex. Of these platforms, just Bitfinex, Tidex and HBUS are not regulated by the New York State Department of Financial Services.

The report claims that some exchanges have failed to implement standard investor and consumer protections; this including adequate security measures as well as market surveillance protocols.

One aspect of this pointed to is an apparent lack of measures to impede ”abusive trading activity”. While the report acknowledges some exchanges have steps to implement safeguards and ”police the fairness of their platforms”, this cannot be said for all of those that participated in the study. The lack of market surveillance capabilities such as those found in traditional trading venues is said to restrict their capabilities of identifying and putting a stop to suspicious trading patterns.

Despite these criticisms, the Attorney General’s office is not looking to shut down or restrict any of their operations. Rather, the report has been conducted to help educate New York-based customers, and encourage the cryptocurrency marketplace to review its own flaws in order to preserve the integrity of transactions.

Should exchanges choose to ignore the advice and not adjust policies of their own accord, in the future the Attorney General’s office may well take legal action against the exchanges.

”As the sector matures, the OAG expects responsible trading platforms – in coordination with consumer advocates, regulators, and law enforcement – to expand the transparency, security, fairness, and accountability of their businesses,” it reads.

 

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US Regulators Subpoena Coinbase, Kraken and Bitstamp in Bitcoin Probe

The US Commodity Future Trading Commission (CFTC) has subpoenaed Coinbase, Kraken, Bitstamp, and ItBit in an ongoing Bitcoin manipulation probe started last month, reports Coingape.

It is thought that the investigation has been initiated due to the distorted prices in the futures market.

Coinbase is one of the world’s major cryptocurrency exchanges with Kraken in 24th position and a 24-hour trading volume of over 54 million. Bitstamp ranks 38th with 28 million daily trading volume, and ItBit is 62nd with a $9.6 million daily trading volume.

The investigation followed the launch of bitcoin futures on CME Group Inc.’s CME, -0.45%  exchange six months ago. CME’s bitcoin futures derive their final value from prices at these exchanges.  Any kind of manipulative trading in those markets is reported to be able to influence the price of bitcoin futures that the government directly regulates.

The exchanges have been requested to submit their trading data to the CFTC in an attempt to prevent distorted prices in the CME futures market. The Wall Street Journal has said that the problem with CME has existed since it launched Bitcoin futures, requesting data from the exchanges in order to base the bitcoin price for futures trading. CFTC officials had previously backed the launch of bitcoin futures, viewing the move as risky, but worthwhile.

Apparently, CME didn’t have the agreements that allowed trading data sharing, and they had to rely on third-party firms to calculate the index, according to Market Watch. On the regulators search into fake orders and spoofing, Jesse Powell, the Chief Executive of Kraken recently commented:

“If there is any kind of attempted manipulation, whoever is doing it is taking a huge amount of risk for very little possible upside.”

The company behind ItBit exchange, Paxos’ Chief Executive Charles Cascarilla stated that “We have definitely entered an unknown area where it is clear there is a desire for tightened oversight.”

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