New York attorney general report: Crypto exchanges are at risk of price manipulation

In April, New York attorney general launched an investigation regarding crypto exchanges. Part of the investigation was to request information from 13 major cryptocurrencies exchanges regarding their businesses, for example how they handle internal controls. Among the exchanges were Coinbase, Binance, and Kraken.

Now, the attorney general reports that several of the big crypto exchanges have flaws in their ways of handling price manipulation. Automated trading on the exchanges can allow a single person or a group of people to hide coordinated trades through multiple accounts in order to manipulate prices, according to the report.

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Risk for insider trading

Another thing the report mentions is that several of the crypto exchanges allow their employees to trade on the company platform. This leads to a risk of insider trading and conflicts of interest if employees buy or sell based on information that the market has not yet gained access to.

Investors deserve to understand how their financial service providers work, how they protect their customer’s assets and how they can guarantee secure transactions, writes the attorney general in the new report.

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