Not too long ago, we saw reports of New York Attorney General, Eric Schneiderman issuing an extensive questionnaire to a number of cryptocurrency exchanges which aimed to extract some information from the exchanges with regards to the legitimacy of their operations. Including some fishing for information on their security integrity.
It is assumed that the questionnaire signals the start of further investigation and regulations from New York authorities, in light of the recent hacks that have taken place internationally. With exchanges seemingly easy to target, many are assuming this questionnaire is the first step towards some much deeper investigations.
All in all, 13 exchanges have been approached with the questionnaire.
The response from Coinbase focuses on their state of the art security parameters, according to Cryptovest, Coinbase have said:
“We have established a cybersecurity program and related policies and training, conduct periodic penetration testing and vulnerability assessments, and undertake security risk assessments among myriad other operational and technical safeguards. We operate an active bug bounty program to pay third-party developers for vulnerability tips. We will continue to invest aggressively in industry-leading technology and practices to secure customers’ data and virtual currency assets, even as our investment and commitment to security go far beyond what the law requires.”
Moreover, within their responses, Coinbase pay heavy focus on how they staff the exchange, stating that they are constantly expanding their engineering team, the branch of Coinbase who are responsible for ensuring that all systems remain secure and of course, up to date.
The continue by discussing their willingness to work alongside authorities and regulators to ensure that they uphold their responsibility to protect their customers.
Thus far, the response by Coinbase seems to be very professional, and, I assume, exactly the sort of response Schneiderman wanted to here.
As this develops, we expect to see more responses surface from the remainder of the cryptocurrency exchanges that have received the questionnaire. As I have mentioned, we can only see how this will go on to provide evidence for further investigations, otherwise, if this wasn’t Schneiderman’s intention from the start, then why would he issue the questionnaires in the first place, surely this is not just out of curiosity and surely there are some deeper motivations driving this?
Either way, assuming the exchanges remain honest and transparent, this shouldn’t cause too much damage. We don’t expect this to be the start of mass regulation across the USA, but until the New York Attorney General’s motivations are made clear, the exchanges at the brunt of this, may start to worry about what’s coming next.
For now, we will continue to see how this story develops.