Prominent cryptocurrency trading platform CoinEx has been sued by New York Attorney General Letitia James for not registering with the state as a securities and commodities broker-dealer while making its services accessible to New York residents. The lawsuit also includes charges stating that CoinEx falsely represents itself as a crypto exchange.
CoinEx Not Registered With New York, Violates Martin Act – Says NY AG
According to a statement released yesterday by the Office of the Attorney General (OAG), they said that they were able to trade cryptocurrencies on CoinEx using a computer with a New-York based IP address despite the exchange not being registered with the state; thus, representing a direct violation of the New York’s Martin Act.
CoinEx is one of the world’s most popular exchanges, with 3 million customers in over 200 countries globally. Via their platform, users can trade several digital assets, including LUNA, RBC, AMP, and $RLY, all of which are considered securities by the New York financial laws.
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To offer services such as securities and commodities brokerage in New York, businesses are required to register with the state. CoinEx’s failure to do so serves as the basis of this lawsuit, according to the Office of the Attorney General.
Commenting on the issue, Attorney General Letitia James said, “Our laws are designed to protect New Yorkers, and when companies ignore them, they put residents, investors, and businesses at risk. The days of crypto companies like CoinEx acting like the rules do not apply to them are 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 its business with the state, the OAG also charges CoinEx for false representation as a cryptocurrency exchange. They claim the Hong-Kong based exchange is not registered nationally with either the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC). Therefore, it is not recognized legally as a cryptocurrency exchange.
On both grounds, the OAG is pushing for a court order that stops the operations of CoinEx in New York immediately, forcing the exchange to block all New-York based IP addresses from interacting with its platform via its website or mobile app.
In response to these allegations, CoinEx released a statement this morning via Twitter, reiterating their commitment to regulatory compliance and the safety and protection of their customers’ investment. They tweeted:
“Given the recent lawsuit against CoinEx for allegedly operating an unregistered cryptocurrency exchange, we are paying high attention to the allegations and taking active steps to address New York Attorney’s concerns promptly.”
The crypto firm further added that “Since CoinEx is keenly aware of how essential a clear regulatory framework is to the long-term development of the industry, we have always attached great importance to regulatory compliance and aim to become a safe and reliable crypto exchange where all users can trade at ease.”
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Interestingly, this lawsuit comes just after CoinEx refused to obey a subpoena issued last month by the OAG, requesting 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 closely.
In other news, the crypto market is maintaining its positive price gains, with its 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