Letitia James, the Attorney General of New York, has filed a lawsuit against CoinEx, a cryptocurrency exchange, alleging that the company misrepresented itself as an exchange since it did not register as a securities and commodities broker-dealer in the state.
In her petition submitted to the New York Supreme Court on February 22, James claimed that CoinEx engaged in persistent fraudulent activities and violated the state’s Martin Act, one of the toughest anti-fraud and securities regulations in the United States.
James also tweeted that New Yorkers are endangered when cryptocurrency platforms flout the law. She further noted that the Attorney General’s Office is working to prevent CoinEx from operating in New York and will continue to protect the public against the risks associated with the cryptocurrency industry.
I’m suing cryptocurrency platform @coinexcom for illegally operating in New York without registering with the state.
⏰Wake-up call: crypto platforms must play by the same set of rules as everyone else.
— NY AG James (@NewYorkStateAG) February 22, 2023
In her words:
“Our laws are designed to protect New Yorkers, and when companies ignore them, they put residents, investors, and businesses at risk.”
CoinEx was also accused of disregarding a subpoena issued by the Attorney General’s Office on December 22, 2022, which requested testimony from CoinEx regarding its virtual asset trading activities. According to the petition, CoinEx was summoned to appear for an examination under oath on January 9, 2023, but failed to do so. The failure of CoinEx to appear is considered conclusive evidence of fraudulent activity.
In this lawsuit, James is seeking a court order that prohibits CoinEx from misrepresenting itself as an exchange, prohibits the company from operating in New York, and instructs CoinEx to implement geo-blocking based on IP addresses and GPS location to restrict access to its mobile app, website, and services from New York.
According to reports earlier this month, the US Securities and Exchange Commission (SEC) may propose new regulations that could affect cryptocurrency companies’ services. It is suggested that the draft proposal would make it harder for cryptocurrency companies to serve as “qualified custodians” for their client’s digital assets. The new restrictions may impact hedge funds, private equity companies, and pension funds related to the cryptocurrency industry.
If you would like to read more news articles like this, visit DeFi Planet and follow us on Twitter, LinkedIn, Facebook, Instagram and CoinMarketCap Community.
“Take control of your crypto portfolio with MARKETS PRO, DeFi Planet’s suite of analytics tools.”
