The New York State Attorney General has launched a further lawsuit this month as cryptocurrency exchange CoinEx has come under fire from the regulator.
NYSAG authorities have accused the exchange of operating as an unregistered securities broker as well as commodity broker-dealer.
Attorney General Letitia James said in a statement: “Our laws are designed to protect New Yorkers, and when companies ignore them, they put residents, investors, and businesses at risk. The days of crypto companies like CoinEx acting like the rules do not apply to them are over. My office will continue to protect New York investors and ensure our state’s laws are followed.”
The Office of the Attorney General (OAG) alleges it could buy and sell cryptocurrencies on CoinEx despite the company not being registered in the New York, citing an affidavit.
It adds the availability of unregistered companies violated New York’s Martin Act, allowing the NYAG to enforce actions to block the exchange from operating in New York. The filing continues that stablecoins such as LUNA, LBC, AMP, and RLY were securities and commodities.
The NYAG filing explained further,
“The Tokens each fall within the Martin Act’s definition of commodities, which includes any foreign currency and any other good, article, or material. CoinEx is engaged in the business of selling and offering to sell commodities through accounts, agreements, or contracts to accounts in New York primarily for investment purposes. The Tokens are also securities under the Martin Act because they represent investments of money in common enterprises with profits to be derived primarily from the efforts of others.”
Heavy Measures on CoinEx
It continued, stating CoinEx refused to comply after the NYAG suboenad the firm. The agency will respond by attempting to block the cryptocurrency firm from accessing local IP addresses and providing “full monetary restitution” along with paying fees.
The news comes as New York authorities aim to step up the agency’s efforts to access tools needed to monitor cryptocurrency activities across the US state.
Additional restrictions came after Paxos stablecoin rival Circle blew the whistle on the former’s cryptocurrency offering to the New York Department of Financial Services (NYDFS) last year.
The agency claims that Binance failed to show sufficient reserves for its Binance USD (BUSD) tokens minted and issued from Paxos.
