Popular cryptocurrency trading platform CoinEx has been sued by New York Attorney General Letitia James for failing to register with the state as a securities and commodities broker-dealer while making its services accessible to New Yorkers. The lawsuit also includes allegations that CoinEx falsely portrayed itself as a crypto exchange.
CoinEx Not Registered with New York, Violates Martin Act – Says NY AG
According to the statement released yesterday by the Office of the Attorney General (OAG), they said that they were able to trade cryptocurrencies in CoinEx using a computer with an IP address based in New-York although the exchange is not registered with the state; thus, representing a direct violation of New York’s Martin Act.
CoinEx is one of the most popular exchanges in the world, with 3 million customers in more than 200 countries around the world. Through the platform, users can trade a number of digital assets, including LUNA, RBC, AMP, and $RLY, all of which are considered securities by New York financial law.
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To offer services such as securities and commodities brokerage in New York, businesses must register with the state. CoinEx’s failure to do so is the basis of this lawsuit, according to the Attorney General’s Office.
Commenting on the issue, Attorney General Letitia James said, “Our laws are designed to protect New Yorkers, and when companies ignore them, they put citizens, investors, and businesses at risk. These days crypto companies like CoinEx act like the rules don’t. applied to them is over. My office will continue to protect New York investors and ensure our state’s laws are followed.
NY AG Also Claims CoinEx Is Not A Crypto Exchange
In addition to failing to register the business with the state, the OAG also charged CoinEx with false representation as a cryptocurrency exchange. They claim that the Hong Kong-based exchange is not nationally registered with the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). Therefore, it is not legally recognized as a cryptocurrency exchange.
On both grounds, the OAG is pushing for court action that halts CoinEx’s operations in New York immediately, forcing the exchange to block all New-York-based IP addresses from interacting with the platform through its website or mobile app.
In response to this allegation, CoinEx released a statement this morning via Twitter, reiterating his commitment to comply with regulations and the safety and protection of customer investments. He tweeted:
“In light of the recent lawsuit against CoinEx for allegedly operating an unregistered cryptocurrency exchange, we are taking these allegations seriously and are taking active steps to promptly address the New York Attorney General’s matter.”
The crypto company further added that “Since CoinEx is well aware of the importance of a clear regulatory framework for the long-term development of the industry, we always attach great importance to regulatory compliance and aim to be a safe and reliable crypto exchange everywhere. all users can trade on facilitate.“
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Interestingly, this lawsuit comes just after CoinEx refused to comply with a subpoena issued last month by the OAG, asking the exchange to explain its digital asset trading activities in New York. For now, it remains unclear how this legal battle will play out; However, all crypto enthusiasts and investors are advised to watch carefully.
In other news, the crypto market maintained positive price gains, with the total market cap set at $1.062 trillion, according to data by Tradingview.
The Crypto Market Valued At $1.062T | Source: TOTAL Chart on TradingView.com
Featured Images: Coincu News, Charts from TradingView.