Bitcoin billionaire Tyler Winklevoss, one-half of the cryptocurrency duo the Winklevoss twins, said he plans to cooperate with New York Attorney General Eric Schneiderman in his inquiry into crypto exchanges like his Gemini platform.
"Gemini applauds the Attorney General's focus on this industry and the Virtual Markets Initiative," Tyler Winklevoss, CEO of Gemini, said in a statement to CNBC. "And we look forward to cooperating with and submitting our responses to the questionnaire that has been circulated."
The Winklevoss twins' Gemini Trust Company was one of 13 cryptocurrency exchanges that were sent questionnaires on April 17 by the New York Attorney General's Office, which launched a wide-scale "inquiry" into how the platforms operate and how they safeguard their customers' assets.
The AG's Office said it launched the "inquiry" amid escalating public interest in bitcoin and the frequent hacks that have plagued the virtual currency ecosystem.
"As part of a broader effort to protect cryptocurrency investors and consumers, the Attorney General's office sent letters to 13 major virtual currency trading platforms requesting key information on their operations, internal controls, and safeguards to protect customer assets," AG Eric Schneiderman revealed in a statement.
"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."
The New York Attorney General's Office sent letters to these major cryptocurrency exchanges.
- Coinbase Inc. (GDAX)
- Gemini Trust Co.
- BitFlyer USA Inc.
- iFinex Inc. (Bitfinex)
- Bitstamp USA
- Payward Inc. (Kraken)
- Bittrex Inc.
- Circle Internet Financial Limited (Poloniex LLC)
- Binance Limited
- Elite Way Developments LLP (Tidex.com)
- Gate Technology Incorporated (Gate.io)
- itBit Trust Company
- Huobi Global Limited (Huobi.Pro).
But the crypto ecosystem remains opaque, unregulated, and decentralized, as regulators have not kept up with the rapid advances in technology.
Accordingly, the U.S. Securities and Exchange Commission and other regulators around the world have started cracking down on the crypto market, saying it's important to protect investors from con artists and scammers.
Bitcoin Skeptics Hop On Blockchain Bandwagon
Even the most vocal bitcoin skeptics like JP Morgan CEO Jamie Dimon (who called bitcoin "a fraud") have expressed confidence in blockchain, the innovative technology behind bitcoin.
Christine Lagarde, the managing director of the International Monetary Fund, said while bitcoin has a way to go before it can shed its image as a vehicle for money-laundering and tax evasion, she praised blockchain and distributed ledger technology.
"Crypto-assets enable fast and inexpensive financial transactions, while offering some of the convenience of cash," Lagarde said. "Some payment services now make overseas transfers in a matter of hours, not days...The underlying technology of crypto-assets — distributed ledger technology, or DLT — could help financial markets function more efficiently."