Cryptocurrency exchange CoinEx has been sued by New York Attorney General Letitia James, alleging that the company falsely presented itself as an exchange because it failed to register as a securities and commodities broker with the state.
A page of 38 petition filed by James in New York Supreme Court on February 22, alleges that CoinEx “engaged in repeated and persistent fraudulent practices” and violated the state’s Martin Act, considered one of the strictest anti-fraud and securities regulation laws in the United States. USA.
He also claimed that CoinEx listed several tokens that qualified as “both commodities and securities” and named Amp (AMP), LBRY Credits (LBC), Rally (RLY), and Terra (LUNA).
When cryptocurrency platforms ignore our laws, they put New Yorkers at risk.
we are trying to stop @coinexcom to operate in New York and will continue to protect people from the dangers of the cryptocurrency industry.
—NY AG James (@NewYorkStateAG) February 22, 2023
On a February 22 statementJames said that CoinEx is not registered with the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) “as required by New York law” to sell the tokens.
The Attorney General’s Office created a CoinEx account with a computer and internet address in New York and claimed it could trade on the platform.
“The days of cryptocurrency companies like CoinEx acting like the rules don’t apply to them are over,” he added.
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The petition also states that CoinEx failed to comply with a December 22, 2022 subpoena sent by the Attorney General’s Office to “provide testimony regarding its platform’s virtual asset trading activities.”
“CoinEx was subpoenaed to appear for an examination under oath on January 9, 2023, and failed to appear […] CoinEx’s non-appearance is prima facie evidence that CoinEx has engaged in the [mentioned] fraudulent practices.”
In the petition, James seeks an injunction to prevent CoinEx from marketing itself as an exchange, prevent it from operating in the state, and order the exchange to geo-block Internet addresses and GPS location data originating in New York. York.
Cointelegraph reached out to CoinEx for comment but did not receive an immediate response.
