CoinEx allowed investors in New York to buy and sell cryptocurrencies without registering with the state
NEW YORK โ New York Attorney General Letitia James sued a cryptocurrency platform, COINEX (CoinEx), for failing to register as a stock and commodity broker and for falsely posing as a cryptocurrency exchange. The Office of the Attorney General (OAG) was able to buy and sell cryptocurrency on CoinEx in New York, even though the company is not registered with the state, which is a violation of New York's Martin Law. Through this enforcement action, Attorney General James seeks permanently prevent CoinEx from operating in New York through its website and mobile applications.
โOur laws are designed to protect New Yorkers, and when businesses ignore them, they put residents, investors and businesses at risk,โ he said. attorney general james. โThe days of cryptocurrency companies like CoinEx acting like the rules don't apply to them are over. My office will continue to protect New York investors and ensure that the laws of our state are followed."
CoinEx is a virtual currency trading platform that allows investors to buy and sell cryptocurrencies 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 did not. 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, for which CoinEx charged a fee.
Additionally, CoinEx claimed to be an exchange, but is not registered with the Securities and Exchange Commission (SEC) as a national stock exchange nor is it properly designated by the Commodity Futures Trading Commission (CFTC) as required by law. from New York. 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 is seeking an injunction preventing CoinEx from misrepresenting that it is 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 the CoinEx mobile application, website and services from New York.
This action continues the efforts of Attorney General James to enforce New York laws in the cryptocurrency industry and protect New York investors. Last month, Attorney General James and a multi-state coalition recovered $24 million from the Nexo cryptocurrency platform for operating illegally. Also in January, Attorney General James sued former Celsius CEO for defrauding investors and hide the dire financial situation of the company. In June 2022, Attorney General James warned New Yorkers of the dangerous risks to invest in cryptocurrencies after the market hit record lows. Also in June, Attorney General James reached almost USD 1 million deal with crypto platform BlockFi Lending LLC for offering unregistered securities. Last March, Attorney General James issued a taxpayer notice to virtual currency investors and your tax advisors to accurately report and pay taxes on your virtual investments. In October 2021, Attorney General James Targeted Unregistered Crypto Lending Platforms cease its operations for not complying with its legal obligations.
Attorney General James once again urges New Yorkers who have been affected by deceptive conduct in the virtual asset market to report these issues to the OAG. Attorney General James also encourages cryptocurrency industry workers who may have witnessed misconduct or fraud to file a complaint. whistleblower complaint with your officewhich can be done anonymously.
The case is being handled by Assistant Attorney General Shantelee Christie of the Office of Investor Protection, assisted by Law Clerks Charmaine Blake and Edward Jaffe, and Investigative Detective Brian Metz of the Investigations Division. The Investor Protection Office is headed by Bureau Chief Shamiso Maswoswe and Deputy Bureau Chief Kenneth Haim and is part of the Division of Economic Justice, which is overseen by Chief Deputy Attorney General Chris D'Angelo and First Deputy Attorney General Jennifer Levy.
