Attorney General Letitia James has banned CoinEx, a Hong Kong-based cryptocurrency exchange, from operating in New York. According to an announcement of June 15, sand seized more than $1.7 million worth of exchange funds for allegedly failing to register as a securities and commodities brokerage.
The settlement resolves a previous lawsuit against CoinEx from February, when the state of New York accused it of falsely presenting itself as an exchange and failing to register with local authorities.
“As part of today’s consent order, CoinEx is prohibited from offering, selling or buying securities and commodities in New York and is prohibited from making its platform available in the state.”reads the ad.
Under the agreement, more than $1.1 million will be returned to 4,691 New York investors and more than $600,000 will be paid to the State in penalties.
There are serious consequences for ignoring New York laws.
As a result of our lawsuit, cryptocurrency platform @coinexcom is banned from operating in New York and the rest of the country and will pay $1.7 million in penalties and refunds for impacted New Yorkers. https://t.co/U3wkdfHu3o
—NY AG James (@NewYorkStateAG) June 15, 2023
There are serious consequences for ignoring New York laws.
As a result of our lawsuit, the @coinexcom cryptocurrency platform is barred from operating in New York and the rest of the country and will pay $1.7 million in fines and refunds to affected New Yorkers.
In addition, CoinEx must apply geoblocking to prevent access from New York IP addresses. CoinEx is also prohibited from creating new accounts for US customers.
“Today’s settlement should serve as a warning to cryptocurrency companies that ignoring New York law has severe consequences. My office will continue to crack down on cryptocurrency companies that blatantly ignore the law, mislead investors, and put danger to New Yorkers”James noted in the announcement.
CoinEx users will be able to retrieve cryptocurrency funds directly from the exchange for the next 90 days. After this period, heEligible investors may receive funds in fiat currency by emailing coinexrefund@ag.ny.gov. According to the announcement, investors will be refunded any cryptocurrency or cash equivalents held in their accounts starting April 25, 2023.
CoinEx was sued by James in the New York Supreme Court on February 22 for allegedly “repeated and persistent fraudulent practices” and for violating Martin’s Law state, one of the most stringent anti-fraud laws in the country. In the complaint, James classified several tokens as “both commodities and securities,” including Amp AMPLBRY Credits (LBC), Rally (RLY) and Terra (MOON).
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