New York Attorney General files lawsuit against Kucoin, declares Ethereum a security – Bitcoin News

On March 9, 2023, New York Attorney General Letitia James announced that her office had once again cracked down on crypto platforms by filing a lawsuit against Seychelles-based crypto exchange Kucoin. Members of the Office of the Attorney General (OAG) were able to purchase crypto assets, despite the exchange not being registered with the government. In addition to the lawsuit, James and the National Audit Office insist that the second largest crypto asset by market capitalization, ethereum, is a security.

Why Ethereum is considered a security according to New York’s OAG

Two weeks ago, New York Attorney General Letitia James and the Office of the Attorney General (OAG) filed a lawsuit against Coinex. On Thursday, the Norwegian Audit Office filed a lawsuit against the crypto trading platform Kucoin. The charges against Kucoin include failure to register as a securities and commodities broker and falsely representing itself as an exchange. James described that through the action she hopes to ban Kucoin from operating in New York and said it was her latest enforcement action to “control cryptocurrency platforms.”

The lawsuit also describes that crypto assets ethereum (ETH), terra (LUNA) and terrausd (UST) are securities. “The petition argues that ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers to provide profits to the holders of ETH,” detailed the complaint’s press release on Thursday. Because New York State’s OAG considers these cryptoassets to be securities, Kucoin failed to register as a licensed broker in the state. The lawsuit itself explains why it defines ethereum (ETH) as a security, as it says:

[Ethereum] promoted as an investment. The developers of [Ethereum] promoted it as an investment contingent on the growth of the Ethereum network. For example, the Ethereum Foundation notes on its website that many [Ethereum] users “see it as an investment, similar to Bitcoin and other cryptocurrencies.” In addition, the ICO documents included representations that [ethereum] production will decrease dramatically over time, resulting in [ethereum] are becoming increasingly scarce and thus more valuable.

While the news of Kucoin being sued by James and the OAG is interesting, the crypto community has been focused on the fact that the New York Attorney General calls ethereum (ETH) a security. After James’ press release and the court filing were published, the topic of whether or not ethereum is a security has become a hot topic of conversation on social media and crypto forums.

The crypto economy is down following the news, now below the $1 trillion mark, down 6.74% to $942 billion. Bitcoin (BTC) lost 7.76% in the last 24 hours and ethereum (ETH) has lost 7.54% against the US dollar.

Do you think the actions of the New York Attorney General will have a significant impact on the regulation of cryptocurrency platforms and do you agree with the declaration of Ethereum as a value? Share your thoughts on this topic in the comments section below.

Jamie Redman

Jamie Redman is the news editor at Bitcoin.com News and a financial technology journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for Bitcoin.com News about the disruptive protocols emerging today.