Cryptocurrency

CoinEx, a cryptocurrency exchange, is involved in a legal battle with New York State

New York Attorney General Letitia James has sued prominent cryptocurrency trading platform CoinEx for failing to register with the state as a securities and commodities broker-dealer while making its services available to New York residents. The lawsuit also alleges that CoinEx falsely represents itself as a cryptocurrency exchange.

CoinEx is not registered in New York and violates the Martin Act. According to a statement released by the Office of the Attorney General (OAG), 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, resulting in a direct violation of the Martin Act of New York. CoinEx is one of the most popular exchanges in the world, with 3 million customers in over 200 countries.

Users can trade several digital assets on their platform, including LUNA, RBC, AMP, and $RLY, which are all classified as securities under New York financial laws.

Businesses in New York must register with the state to provide services such as securities and commodities brokerage. CoinEx's failure to do so is the basis for this lawsuit. "Our laws are designed to protect New Yorkers, and when companies ignore them, they put residents, investors, and businesses at risk," said Attorney General Letitia James. The days of cryptocurrency companies acting as if the rules do not apply to them are over. My office will continue to protect New York investors and enforce state laws." The OAG charges CoinEx with false representation as a cryptocurrency exchange in addition to failing to register its business with the state.

They claim that the Hong Kong-based exchange is not registered with the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) on a national level. As a result, it is not legally recognized as a cryptocurrency exchange.

On both grounds, the OAG is seeking a court order to immediately halt CoinEx's operations in New York, requiring the exchange to block all New York-based IP addresses from interacting with its platform via its website or mobile app. CoinEx issued a statement this morning via Twitter in response to these allegations, reiterating their commitment to regulatory compliance as well as the safety and protection of their customers' investments.

"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 with ease," the crypto firm continued. Surprisingly, this lawsuit comes just days after CoinEx refused to comply with an OAG subpoena issued last month, which asked the exchange to explain its digital asset trading activities in New York. For the time being, it is unclear how this legal battle will play out; however, all cryptocurrency enthusiasts and investors are advised to keep a close eye on the situation. In other news, the cryptocurrency market has maintained its positive price gains, with a total market cap of US$1.062 trillion.