• New York Attorney General Letitia James has announced the filing of a lawsuit against the Hong Kong-based crypto exchange CoinEx for selling unregistered securities and commodities.
• The AG’s office claims that CoinEx falsely represented itself as a crypto exchange and sold LUNA, AMP, LBC, and RLY tokens without a permit in New York.
• The NYAG is now requesting a geolocation block of CoinEx for all New Yorkers and a ban on their mobile app.
NY Attorney General Sues CoinEx
The New York Attorney General Letitia James has filed a lawsuit against the Hong Kong-based crypto exchange CoinEx for allegedly selling unregistered securities and commodities. According to the press release published by the AGs‘ office, CoinEx falsely represented itself as an exchange and sold cryptos such as LUNA, AMP, LBC, and RLY without obtaining permission from U.S. regulators first.
CoinEx Violates Broker Requirements
The AG’s office was able to purchase these tokens using an IP based in New York – where CoinEx is not licensed as a broker. Therefore, they are now requesting that CoinEx blocks its services to all residents of New York state, as well as prohibiting its mobile app within this region.
Investors at Risk
According to Letitia James, investors are being put at risk due to CoinEx’s lack of registering their business accurately: “Our laws are designed to protect New Yorkers…when companies ignore them they put residents, investors and businesses at risk.“
Increased Regulatory Pressure on Crypto Exchanges
This latest action taken by U.S regulators reflects increased pressure across 2022 due to several cryptocurrency bankruptcies occurring during this period. The SEC is among other regulatory bodies that have recently tightened regulations surrounding cryptocurrencies in order to protect investors from unforeseen risks associated with digital assets trading.
Conclusion
CoinEx’s alleged false representation of itself being an exchange could have serious implications if found guilty by the court – especially considering the increasing attention given by authorities towards cryptocurrencies over recent weeks. Nonetheless, it remains unclear what punishment will be imposed if found guilty but one thing is certain: investor protection is becoming more important than ever before when it comes to digital asset trading in the US market today.