Cryptocurrency traders at centre of major investigation into Bitcoin fraud

BITCOIN traders are at the centre of a massive investigation into fraud, policy and money laundering.

The New York Attorney General has launched probes into 13 major cryptocurrency exchanges.

General Eric Schneiderman has ordered Coinbase, Gemini, Bit Trust, and others, to provide more facts for investors and traders in the infant market.

He wants more information about their general operations, personnel, and policies around privacy, fraud and money laundering.

There is no suggestion of any wrong doing from any exchanges listed.

Attorney General Schneiderman said: “With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money.

“Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms.

“Our Virtual Markets Integrity Initiative sets out to change that, promoting the accountability and transparency in the virtual currency marketplace that investors and consumers deserve.”

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Despite being centred in New York, the investigation could have global ramifications.

Bitcoin has also collapsed more than 50 percent from its peak of more than $19,200 in December to about $8,000 on Tuesday.

Similar virtual currencies, like Ether and Ripple, have also had volatile rides this year as governments around the world have cracked down.

In his letter to the exchanges, Schneiderman called the virtual currencies “a highly speculative sector, featuring significant volatility, instability, and risk.”

“Moreover, published reports indicate the sector has attracted fraudsters, manipulators, and thieves,” Schneiderman wrote.

Among those being questioned are the Winklevoss twins, famous for their legal wranglings with Mark Zuckerberg over the origins of Facebook.

“We look forward to cooperating with and submitting our responses to the questionnaire that has been circulated,” Gemini CEO Tyler Winklevoss told the new York Post.


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