
A.G. Schneiderman Launches Inquiry into Cryptocurrency “Exchanges” - vincentchu
https://ag.ny.gov/press-release/ag-schneiderman-launches-inquiry-cryptocurrency-exchanges
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austincheney
I suspect they would find some efficiently fraudulent manipulation in the
complete absence of regulation, if only those exchanges were regulated enough
to retain data sufficient for such inquiries.

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pjc50
Fortunately all the cryptocurrency in and out transactions are irrevocably
documented on a public legder.

~~~
ceejayoz
One exchange user selling to another user on the same exchange (or to
themselves, i.e. a wash trade) needn't hit the public ledger.

~~~
oarsinsync
Indeed. Only when crypto funds leave the exchange does it hit the ledger. When
it’s in the exchange, it’s all in their private database.

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aje403
Interesting to see it's in new york - I wonder what role the big players in
finance have had in lobbying for this. Nonetheless, this is great. I would bet
every single crypto exchange has their hand deep in the honey pot so they
deserve whatever an investigation turns up.

~~~
darawk
> I would bet every single crypto exchange has their hand deep in the honey
> pot

I really doubt it. These exchanges are making unbelievable amounts of money in
fees. There's no reason for them to risk that just to make a little more.

~~~
spookthesunset
These exchanges are all operating completely outside of any regulation or
oversight. I wouldn't be surprised to find if most of them were completely
insolvent and didn't hold a good majority of the crypto currency they claim
to. I also wouldn't be surprised if a good fraction of their exchange volume
was completely fabricated.

If you use these exchanges, you are basically playing in a wild-west casino
where the house has every single advantage and every incentive to siphon off
every dime of your money.

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drcode
Boy, if only there were some big New York banks that would love to help these
exchanges smooth things over with Mr. Schneiderman in exchange for some
controlling equity...

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JumpCrisscross
> _big New York banks that would love to help these exchanges smooth things
> over with Mr. Schneiderman_

The New York Department of Financial Services and Attorney General's offices
are some of the few state offices that relish going after banks. If you're a
New Yorker, getting a dispute resolved with a large bank typically only
involves Cc'ing one or both (if the facts are on your side).

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SirLJ
Just reading the questionnaire... This is going to be huge as in this is going
to be the foundation on which the government will go after the exchanges and
enforce consumer protection...

~~~
drcode
Apologies if I don't feel particularly "protected".

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SirLJ
I am fully protected against all bitcoin/token/blockchain scams, I wont touch
this stuff with 10 foot pole...

~~~
nukeop
You're also extremely protected from ever making any profits, I'm glad people
like you stay out of crypto out of fear.

~~~
SirLJ
Don't you worry, I make plenty of profits in the markets, using AI trading
robots, but I would never transfer 6 or 7 digits account to one of those shady
exchanges, just to watch my money being stolen by crooks...

Just wait few more months and the sign "This domains has been seized by the
FBI" will start to pop around...

~~~
drcode
Why would you move such a large amount to an exchange all at once? It's much
safer to move smaller amounts and move the funds to your own crypto wallet
with your own private keys, that way you don't have to trust them with large
sums.

~~~
SirLJ
You need money to make money in trading...

For investing, not surprising, the whole thing is going the way of the tulip
bubble... it's just not worth discussing a 25 year old technology still
looking for a problem to solve...

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jMyles
I'll point out the obvious, just to get the discussion going: it's reasonable
to suspect that the motivation is not consumer protection but subversion of
technology which presents a challenge to the FIRE economy, which has a tragic
stranglehold on NY (my home state).

How will we know the difference? What will we do if indeed it's the latter?

~~~
Sangermaine
> it's reasonable to suspect that the motivation is not consumer protection
> but subversion of technology which presents a challenge to the FIRE economy

No, it isn't. It's only reasonable within the tiny fantasy world of True
Believers where the whole world is conspiring to keep the glory of
cryptocurrency down. This is the exact same action that would be taken against
any other unauthorized, unregistered securities trading. Not to mention an
area which has become infamously rife with scams and fraud.

Schneiderman especially has a sterling reputation with regard to pushing
against the great financial powers and investigating crimes in that area.

~~~
cycrutchfield
>the tiny fantasy world of True Believers

Let's not give them the benefit of the doubt here. They're shills. They have a
vested financial interest in twisting logic and reason to convince the world
that a secret cabal of bureaucrats and bankers are conspiring against this
particular technology.

This is the primary problem with discussing anything crypto-related online. In
a technical discussion about the merits of Linux and free software, you can be
reasonably sure that whomever you are engaging with does not have a financial
interest in pushing their particular stance. It seems like in any crypto-
related discussion, it is impossible to find honest, impartial debate.

~~~
jMyles
> Let's not give them the benefit of the doubt here. They're shills.

Excuse me - are you addressing me with this comment? My identity is not
secret. My contributions to open source software (and to higher education in
New York State) are reasonably well known.

Are you seriously directly calling me a shill right now?

Is this the level of discussion that we've reached on HN now?

FWIW, I think my comments have been pretty moderate. I don't see anything that
is even vaguely construable as shilling. Nor am I positioned with anywhere
near the resources to make shilling worthwhile.

Rather than a shill, I am a long-time NY activist who has deep problems with
the way my government has interacted with nearly every facet of the (largely
toxic) financial industry in my state. I don't think that concerns regarding
the underlying motivation of the AG's office are _ever_ unreasonable to raise,
and certainly not here.

~~~
cycrutchfield
Sorry, I was not referring to you here, although I realize that it's confusing
given the threading. I was more referring to some of the other posters here
(the "True Believers" referred above).

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hapnin
Too bad they didn't question the big banks as assiduously 10-12 years ago.

~~~
aje403
Were you Don Quixote in another life? It's almost like the banks don't have
thousands of different products and services ran by hundreds of thousands of
people all working on different things. "Let's investigate the banks and see
what comes up!" Good luck with that...

~~~
hapnin
Please leave the personal comments out. Thanks.

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arisAlexis
since when one guy can crack down on global exchanges. this is why we need
decentralised exchanges

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empath75
He’s not ‘one guy’. He’s the chief prosecutor of the state that happens to be
the home of one of the world’s financial capitals.

If you want New York money, you need to deal with the New York legal system.

Decentralized exchanges won’t help you either. Any time you interface with a
nation’s currency, you’re going to deal with that nation’s government.

~~~
arisAlexis
sure but he cannot do anything to an exchange that operates from Malta or Honk
Kong.

