The New York State Attorney General's Office published a 42-page report on 9 cryptocurrency exchanges and noted various high risks associated with security and conflict of interest.

The report entitled "Virtual Markets Integrity Report", published by the New York State Attorney General's Office, describes the risks of trading cryptocurrencies on trading platforms, or so-called crypto exchanges, and those mechanisms and practices that the Prosecutor General's Office deemed risky.

Back in April 2018, the Attorney General of the State of New York sent requests to 13 crypto exchanges soliciting them to provide exhaustive information about their financial condition and security systems. Only 9 cryptocurrency exchanges agreed to participate in the initiative of the New York authorities, and one of them - HBUS - was invited separately.

According to the Attorney General's Office, the main risks faced by cryptocurrency exchanges and their users are market manipulations, conflict of interests and an inappropriate system of abuse protection.

"But unlike those traditional players, virtual asset trading platforms now in operation have not registered under state or federal securities or commodities laws. Nor have they implemented common standards for security, internal controls, market surveillance protocols, disclosures, or other investor and consumer protections," the report says.

The Prosecutor General's Office reported that four crypto exchanges - Binance, Kraken and Huobi - refused to provide any information, explaining their decision by not working with residents of the State of New York. Nevertheless, the Prosecutor General's Office examined their activities and sent the results of the investigation to the Financial Services Department of New York. The OAG did not provide detailed information about what violations exactly were found in these cryptocurrency exchanges. But it is possible to assume that the Prosecutor General's Office found that residents from New York still have the opportunity to trade on these sites, despite the ban.

The report mentioned that although all crypto exchanges monitor their users IP, only Bitstamp and Poloniex block those clients who are trying to access them via modified IP through VPN services.

Furthermore, the OAG reported that the examined cryptocurrency exchanges are trading themselves on their platforms. Thus, more than 20% of Coinbase trades are made by the cryptocurrency exchange itself.