New York Bans Crypto Exchange CoinEx
- CoinEx did not admit to any wrongdoing despite opting for a settlement.
- The agreement forbids CoinEx from operating in New York again.
- New York Attorney General Letitia James sued CoinEx in February for violating state laws by buying and selling cryptocurrencies without registering with local authorities.
Attorney General Letitia James has imposed a ban on the operation of the Hong Kong-based cryptocurrency exchange CoinEx in New York. James accused the exchange of operating illegally in New York and failing to register as a securities and commodities brokerage. CoinEx reportedly agreed to pay $1.8 and accepted the ban from New York.
According to an announcement,
As part of today’s consent order, CoinEx is banned from offering, selling, or purchasing securities and commodities in New York and from making its platform available in the state.
According to the agreement, 4,691 New York investors will be refunded over $1.1 million, while the state of New York will receive more than $600,000 in fines. In addition, CoinEx is required to implement geo-blocking to prevent access by New York IP addresses. The settlement also forbids CoinEx from creating new accounts for US users. CoinEx, however, did not agree to any wrongdoing in its decision to settle.
Attorney General Letitia James explained that “unregistered crypto platforms pose a risk to investors, consumers, and the broader economy.” James added that “today’s agreement should serve as a warning to crypto companies that there are hefty consequences for ignoring New York’s laws.”
James has stayed active in the fight against “shadowy” crypto companies. The American lawyer and politician sued CoinEx in February for failing to register before buying and selling tokens like Rally, LUNA, LBRY, and AMP. James claimed CoinEx violated the Martin Act by failing to register. The Martin Act is a state law used against financial crimes such as fraud.
James, in her statement today, assured that her “office will continue to crack down on crypto companies that brazenly disregard the law, mislead investors, and put New Yorkers at risk.”
James isn’t the only one closely watching crypto companies. Gary Gensler, the chair of the US Securities and Exchange Commission (SEC), is also after the industry. The SEC, led by Gensler, has taken a series of enforcement actions against some of the top crypto service providers, such as Binance, Kraken, and Coinbase.
Gensler has also maintained that some cryptocurrencies qualify as securities, bringing the industry within his jurisdiction. However, crypto companies have rejected such claims and accused Gensler of double standards.
Interestingly, many within and outside the crypto community believe Gensler’s action is a threat to innovation and could push the US out of the race to become a global player in the crypto industry.
Some US lawmakers recently proposed a law that would restructure the SEC and ultimately fire Gensler from his post. However, removing Gensler from power isn’t the solution the industry needs. Crypto service providers need US regulators to develop a uniform policy that would guide the industry and provide clarity for operations.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
