Attorney General claims CoinEx offered its services without being registered as a "commodity broker-dealer and a securities broker or dealer in New York."
New York’s Attorney General, Letitia James, has sued Hong Kong-based crypto exchange CoinEx.
In the petition filed in the New York Supreme Court on February 22nd, NY Attorney General claims that CoinEx illegally offered its services in New York.
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New York Attorney General alleges that CoinEx offered crypto exchange services in New York without a proper license. Additionally, the exchange is accused of failing to comply with a subpoena served several weeks ago.
CoinEx offered, sold, purchased and effected transactions in cryptocurrencies that are commodities and securities, without having been registered as a commodity broker-dealer and a securities broker or dealer in New York.
In the petition, Attorney General also alleges that some cryptocurrencies offered by CoinEx are classified as securities under the Martin Act, the securities and anti-fraud law in NY. According to the petition, the coins are an investment in a common enterprise, with profits derived from the efforts of others.
The four tokens considered securities are LBRY Credits token (LBC), Amp (AMP), Terra (LUNA), and Rally (RLY).
Attorney General James noted that she wants the exchange barred from continuing its operation in New York. On top of that, Letitia James is asking to ban New York-based IP addresses from accessing CoinEx.
Finally, the petition calls for a full refund "all fees received from New York customers.” Consequently, the civil lawsuit is seeking restitution.
In the statement, Attorney General Letitia James highlighted:
The days of crypto companies like CoinEx acting like the rules do not apply to them are over.
The New York Attorney General's office has reached success in similar lawsuits. In January, New York and nine other states secured up to $24 million from crypto company Nexo Inc. and its affiliate firm. The two had been accused of operating without proper licensing and misleading users about their licensing status.
CoinEx has yet to issue a statement on the lawsuit.