CoinEx Exchange Sued by NY Attorney General
On 22 February, New York Attorney General Letitia James filed a lawsuit against CoinEx. The allegations state that the cryptocurrency exchange conducted business unlawfully as it failed to register with the state.
New York sues CoinEx exchange
James charged CoinEx exchange with failing to register as a commodities and securities broker-dealer in the state. The 38-page petition filed in the New York Supreme Court alleged that CoinEx violated the state's Martin Act, which is known as one of the most rigorous anti-fraud and securities regulation laws in the US.
According to the petition, CoinEx was "engaged in repeated and persistent fraudulent practices". The lawsuit also accused the exchange of listing tokens such as Amp, LBRY Credits (LBC), Rally (RLY), and Terra LUNA, which qualified as "both commodities and securities".
James stated that the crypto exchange was not registered with the Commodity Futures Trading Commission or the Securities and Exchange Commission, as required under New York law to sell these tokens.
The petition further alleges that the company failed to comply with a 22 December subpoena sent by the Attorney General's Office to "provide testimony concerning the virtual asset trading activities of its platform".
As per the petition, James seeks a court order to prevent CoinEx from marketing itself as an exchange and stop it from operating in the state by ordering it to geoblock internet addresses and GPS location data from New York.
Cryptocurrency exchanges must comply with legal standards
James made it clear that cryptocurrency companies cannot ignore regulatory requirements. In a statement, she said the days of cryptocurrency companies behaving as if rules do not apply to them "are over".
With this lawsuit, the New York Attorney General's office is taking a stance on upholding securities regulation laws and ensuring that companies operating in the state comply with them.
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