• CoinEx, a Hong Kong-based crypto platform, is facing a lawsuit from New York Attorney General Letitia James.
• The lawsuit accuses the firm of falsely presenting itself as an exchange by not registering as a securities and commodities broker-dealer in the state.
• The NYAG’s office is seeking CoinEx to geofence New York by blocking local IP addresses, cease doing any business in the state, provide „full monetary restitution“, and pay NYAG fees.
CoinEx Sued By New York Attorney General
Hong Kong-based crypto platform CoinEx is facing a lawsuit from New York Attorney General Letitia James for allegedly falsely presenting itself as an exchange without registering as a securities and commodities broker-dealer in the state.
Allegations Against CoinEx
The petition filed on Feb. 22 in the Supreme Court of the State of New York claims that CoinEx had listed various tokens and services that qualify as securities and/or commodities under state law. Additionally, it was alleged that CoinEx had failed to comply with a subpoena issued on Dec. 22, 2022 requiring them to “provide testimony concerning the virtual asset trading activities of its platform”.
New York Regulations
When crypto platforms disregard our laws, they put New Yorkers at risk according to Twitter post by NY AG James (@NewYorkStateAG) on February 22 2023. As such, the NYAG’s office is seeking CoinEx to geofence New York by blocking local IP addresses, cease doing any business in the state, provide „full monetary restitution“, and pay NYAG fees.
History Of Crypto Lawsuits In New York
New York has been actively involved in filing lawsuits against other firms including Alex Mashinsky (former CEO of crypto lender Celsius), Bitfinex and Tether previously. This makes CoinEx just another cryptocurrency exchange facing legal action over its operations after Nexo Inc was required to pay up to $22.5 million to resolve civil claims earlier this year (Jan 2021).
Conclusion
It remains uncertain how this case will pan out but it clearly shows how authorities are clamping down on exchanges operating without proper registration or licensure from regulators in order to protect consumers from potential risks associated with cryptocurrencies