New York Attorney General Letitia James sued cryptocurrency exchange Coinex “for failing to register as a stock and commodity broker and for falsely representing itself as a cryptocurrency exchange.” The New York attorney general also stressed 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 purported to be securities.
Coinex Violates New York Law, Says ROBO Letitia James
The New York Attorney General’s (NYAG) office, Letitia James, announced Wednesday that the attorney general is suing cryptocurrency trading platform Coinex “for failing to register as a stock and commodity broker and for falsely posing as a cryptocurrency exchange.” The details of the announcement:
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.
The OAG explained that it created an account with Coinex using a New York-based computer with an IP address to buy and sell cryptocurrency, for which Coinex charged a fee. The states Martin Law gives the attorney general broad law enforcement powers to conduct investigations of suspected fraud in the offer, sale, or purchase of securities.
The Attorney General’s Office further alleged that Coinex offers exchange of crypto tokens that are securities and commodities, naming AMP, LUNA, LBC, and RLY in particular. “New York law requires brokers in securities and commodities to register with the state, which Coinex did not,” the announcement underlines.
Coinex Allegedly Offers Securities Trading Without SEC Registration
The New York 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 stock exchange or properly designated by the Commodity Futures Trading Commission.” (CFTC) as required under New York 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. The announcement more details:
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.
Coinex issued a statement on Thursday in response to the NYAG James enforcement action. The exchange stated:
Given the recent lawsuit against Coinex for allegedly operating an unregistered cryptocurrency exchange, we are paying close attention to the allegations and taking active steps to address the New York prosecutor’s concerns promptly.
James has taken action against various crypto companies 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 hiding the company’s dire financial situation.
In June 2022, he reached a nearly $1 million settlement with crypto lender Blockfi for offering unregistered securities. In October 2021, he ordered unregistered cryptocurrency lending platforms to cease operations for failing to comply with their legal obligations. In September 2021, it shut down the Coinseed cryptocurrency trading platform. In November of last year, he urged Congress to ban cryptocurrency in retirement accounts.
What do you think about New York Attorney General Letitia James taking action against Coinex? Let us know in the comments section.
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