A report by the Office of the Attorney General to the state of New York (OAG) has been reviewed by the Financial Times (FT) who claims that crypto trading platforms are clear at “early stages of maturation”.
The OAG report goes to some lengths to indicate that crypto-asset exchanges are demonstrating that they offer a wide variety of functions and implementations, while showing a high degree of “integrity” in the main.
OAG has recently conducted a survey in order to elicit responses from major cryptocurrency trading platforms on topics such as jurisdiction, fees, acceptance policies of fiat currency, security and insurance, employees’ trading practices, algorithmic or API high-frequency trading and Know-Your-Customer (KYC) standards.
FT suggested that crypto exchanges will slowly come to carry the same sort of weight in the financial sector as tradition trading platforms. However, one issue of concern continues to be how to prevent incidents of “abusive trading activity”. Conflicts of interest have the potential to damage the reputation of crypto exchanges due to the multi-functional nature of many exchanges such as also acting as brokers, money-changers, proprietary traders and in some cases, issuers of proprietary digital tokens.
The report suggests that the lack of industry-standard KYC can lead to malpractice and the diminishing of accepted industry standards. In terms of naming exchanges and those demonstrating a good code of practice, Circle’s Poloniex came top by matching nearly all the OAG’s recommendations. Not so BitForex which was named by FT in an article which detailed the platform’s incidents of wash trading and faking of trading volumes. A Bloomberg article recently commented on Bitforex’s rise from obscurity to the top over a period of months:
“Doubts about the integrity of crypto markets have deterred some professional money managers from investing in virtual currencies and prompted regulators to take a closer look at exchanges, even as some venues go to great lengths to avoid manipulation.”
BitForex may just be “one of the worst offenders in this parade of inflated volume”, according to Dmitriy Budorin, CEO of cybersecurity firm Hacken and founder of Crypto Exchange Ranks.
Follow BitcoinNews.com on Twitter: @bitcoinnewscom
Telegram Alerts from BitcoinNews.com: https://t.me/bconews
Want to advertise or get published on BitcoinNews.com? – View our Media Kit PDF here.
Image Courtesy: Pixabay