NY Attorney General sues crypto platform CoinEx for failing to register with State
New York Attorney General Letitia James has taken cryptocurrency platform CoinEx to Court for failing to register as a securities and commodities broker-dealer and for falsely representing itself as a crypto exchange.
The Office of the Attorney General (OAG) was able to buy and sell cryptocurrencies on CoinEx in New York, although the company is unregistered in the state, which is a violation of New York’s Martin Act. Through this enforcement action, Attorney General James seeks to permanently stop CoinEx from operating in New York through its website and mobile apps.
CoinEx is a virtual currency trading platform that allows investors to buy and sell cryptocurrency through its website and app. On its platform, CoinEx investors can buy and sell popular virtual currencies, including AMP, LUNA, LBC, and $RLY, which are securities and commodities.
New York law requires securities and commodities brokers to register with the state, which CoinEx failed to do. The OAG was able to create an account with CoinEx using a computer with a New York based IP address to buy and sell digital tokens, which CoinEx charged a fee for.
In addition, 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 is required under New York law. CoinEx also failed to comply with a subpoena issued by OAG to provide more information about its digital asset trading activities in the state.
Through her lawsuit, Attorney General James seeks a court order that stops CoinEx from misrepresenting that it is an exchange, prevents the company from operating in New York, and directs 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.
This action continues Attorney General James’ efforts to enforce New York laws in the cryptocurrency industry and protect New York investors.
Last month, Attorney General James and a multistate coalition recovered $24 million from the cryptocurrency platform Nexo for operating illegally. Also in January, Attorney General James sued the former CEO of Celsius for defrauding investors and concealing the company’s dire financial condition.
In June 2022, Attorney General James warned New Yorkers of the dangerous risks of investing in cryptocurrencies after the market reached then-record lows. Also in June, Attorney General James reached a nearly $1 million settlement with crypto platform BlockFi Lending LLC for offering unregistered securities.