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New York Attorney General Sues Crypto Exchange Coinex – Claims Trading Platform Offers Unregistered Securities – Regulation Bitcoin News
New York Attorney General Letitia James has sued cryptocurrency exchange Coinex “for failing to register as a securities and commodities broker and for falsely representing itself as a crypto exchange.” The NY Attorney General also emphasized that Coinex is not registered with the US Securities and Exchange Commission (SEC), even though the platform allows users to trade crypto-tokens that are allegedly securities.
Coinex Violates New York Law, Says NYAG Letitia James
The office of New York Attorney General (NYAG) Letitia James announced Wednesday that the attorney general has sued cryptocurrency trading platform Coinex “for failing to register as a securities and commodities broker and for falsely representing itself as a crypto exchange.” Announcement Details:
The Office of the Attorney General (OAG) was able to buy and sell cryptocurrencies on Coinex in New York, even though the company is unregistered in the state, which is a violation of New York’s Martin Act.
The National Audit Office explained that it created an account with Coinex using a computer with a New York-based IP address to buy and sell cryptocurrencies, for which Coinex charged a fee. The state’s Martin Act gives the Attorney General broad law enforcement powers to conduct investigations into suspected fraud in the offer, sale or purchase of securities.
The attorney general’s office further alleged that Coinex offers trading in crypto tokens that are securities and commodities, specifically naming AMP, LUNA, LBC and RLY. “New York law requires securities and commodities brokers to register with the state, which Coinex failed to do,” the announcement emphasizes.
Coinex reportedly offers securities trading without registering with the SEC
The NY Attorney General’s Office also stated that “Coinex claimed to be an exchange but is not registered with the Securities and Exchange Commission (SEC) as a national securities exchange or appropriately designated by the Commodity Futures Trading Commission (CFTC) as required under the New York- the law.”
Furthermore, “Coinex also failed to comply with a subpoena issued by the OAG to provide more information about its digital asset trading activities in the state,” the attorney general’s office noted. Additional details in the announcement:
Through her lawsuit, Attorney General James is seeking an injunction stopping Coinex from misrepresenting itself as an exchange, preventing the company from operating in New York, and ordering Coinex to implement geo-blocking based on IP addresses and GPS location to prevent access to Coinex’s mobile app, website and services from New York.
Coinex released a statement on Thursday in response to the enforcement of NYAG James. The exchange said:
Given the recent lawsuit against Coinex for allegedly operating an unregistered cryptocurrency exchange, we are paying close attention to the allegations and are taking active steps to immediately address the New York Attorney’s concerns.
James has taken action against several crypto firms in the past. Last month, she and a multi-state coalition recovered $24 million from Nexo. In January, she sued former Celsius CEO Alex Mashinsky for defrauding investors and concealing the company’s dire financial condition.
In June 2022, she reached a nearly $1 million settlement with crypto lender Blockfi for offering unregistered securities. In October 2021, she ordered unregistered crypto-lending platforms to cease operations for failing to meet their legal obligations. In September 2021, she shut down the crypto trading platform Coinseed. Last November, she urged Congress to ban crypto from retirement accounts.
What do you think about New York Attorney General Letitia James taking action against Coinex? Let us know in the comments section below.
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