New York Attorney General’s Request Concerning Cryptocurrency Exchanges: The Sites’ Reaction and the Sharp Response of Kraken

As previously reported, the Attorney General of the State of New York sent inquiries to 13 cryptocurrency exchanges: Poloniex, Tidex, Kraken, Binance, Bittrex, itBit, Bitstamp, Gate.io, Bitfinex, Huobi.Pro, GDAX, bitFlyer and Gemini. In the message Eric Schneiderman asked them to provide information about their activities, which includes information about owners, management, operations, rules, privacy policy and trading volumes.

Most of the trading sites responded positively to this request, as CoinDesk reports.

Gemini’s CEO Tyler Winklevoss said his company “welcomes” such a decision:

“We look forward to cooperating with and submitted our responses to the questionnaire…We continue to embrace thoughtful regulation and collaboration on our mission to help build the future of money,” he added.

The representative of Bittrex responded in almost the same way:

“We look forward to working with NY Attorney General Schneiderman on our shared goal of improving transparency, accountability and security across all virtual currency trading platforms”.

The initiative was supported by the leaders of such cryptocurrency exchanges as Circle and BitFlyer.

The director of Bitfinex Communications Casper Rasmussen expressed a more restrained opinion in this regard:

“We can confirm that Bitfinex is aware of the New York Attorney General’s inquiry regarding our operations, controls, and general user protections. Bitfinex is committed to compliance with authorities and regulators worldwide and we look forward to responding to this inquiry.”

Unlike colleagues, Kraken representatives decided to take a completely opposite position.

The CEO of Kraken Jesse Powell confirmed in a letter to CoinDesk the information that his exchange will not answer questions from the New York Attorney General.

“I realized that we made the wise decision to get the hell out of New York three years ago and that we can dodge this bullet”.

Kraken announced that it will leave the state in 2015 due to the crypto-currency normative base of BitLicense. In a blog post at the time, the exchange called the law “creating so dirty, so cruel that even Kraken does not have the courage or strength to resist his nasty, big, sharp teeth”.

The representatives of the cryptocurrency exchange Kraken are not alone in the decision to leave New York because of BitLicense. The set of BitLicense rules turned out to be ineffective, as most cryptocurrency companies found it inadequate and simply refused to continue working in New York. In February, lawmakers raised the issue of revising or even completely abolishing BitLicense.