Hong Kong-based cryptocurrency exchange CoinEx has been banned from operating in New York by Attorney General Letitia James. According to a June 15 announcement, CoinEx had more than $1.7 million worth of exchange funds seized for allegedly failing to register as a securities and commodities brokerage firm.
The agreement resolves a previous lawsuit against CoinEx in February, when the New York attorney general accused CoinEx of falsely representing itself as an exchange and failing to register with local authorities. "As part of today's consent order, CoinEx is prohibited from issuing, selling or purchasing securities and commodities in New York and from offering its platform in the state,” the announcement read.
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 New York State as penalties. Additionally, CoinEx had to implement geo-blocking to prevent access from New York IP address es. CoinEx It also prohibits the creation of any new accounts for US customers.
"Today's agreement should serve as a warning to crypto companies that ignoring New York law has severe consequences. My office will continue to crack down on crypto companies that blatantly ignore the law, mislead investors, and put New Yorkers at risk," James pointed out in the announcement.
Over the next 90 days, CoinEx users will be able to withdraw their cryptocurrency funds directly from the exchange. After this period, eligible investors will be able to receive funds in fiat currency by emailing coinexrefund@ag.ny.gov. According to the announcement , as of April 25, 2023, investors will be refunded cryptocurrencies or cash equivalents held in their accounts.
CoinEx was instructed by James in New York Supreme Court on Feb. 22 for alleged “repeated and persistent fraud” and violations of the state's Martin Act, one of the state's strictest anti-fraud laws. In the complaint, James classifies various tokens as " commodities and securities," including Amp, LBRY Credits (LBC), Rally (RLY) and Terra.
