Letitia James sues CoinEx, says crypto exchange failed to register with state
New York Attorney General Letitia James has sued cryptocurrency exchange Coinex “for failing to register as a securities and commodities broker-dealer and for falsely representing itself as a crypto exchange.” The NY attorney general also stressed that Coinex is not registered with the U.S. Securities and Exchange Commission (SEC) even though the platform lets users trade crypto tokens that are allegedly securities.
The OAG explained that it created an account with Coinex using a computer with a New York-based IP address to buy and sell cryptocurrencies, which Coinex charged a fee for. The state’s Martin Act gives the attorney general broad law-enforcement powers to conduct investigations of suspected fraud in the offer, sale, or purchase of securities.
The Attorney General’s Office further alleged that Coinex offers trading of crypto tokens that are securities and commodities, naming AMP, LUNA, LBC, and RLY in particular. “New York law requires securities and commodities brokers to register with the state, which Coinex failed to do,” the announcement stresses.
The NY Attorney General’s Office also stated that “Coinex claimed to be an exchange, but is not registered with the Securities and Exchange Commission (SEC) as a national securities exchange or appropriately designated by the Commodity Futures Trading Commission (CFTC) as is required under New York law.”
Furthermore, “Coinex also failed to comply with a subpoena issued by OAG to provide more information about its digital asset trading activities in the state,” the Attorney General’s Office noted
James has taken action against several crypto firms in the past. Last month, she and a multistate coalition recovered $24 million from Nexo. In January, she sued former Celsius CEO Alex Mashinsky for defrauding investors and concealing the company’s dire financial condition.
In June 2022, she reached a settlement of nearly $1 million with crypto lender Blockfi for offering unregistered securities. In October 2021, she directed unregistered crypto lending platforms to cease operations for not fulfilling their legal obligations. In September 2021, she shut down crypto trading platform Coinseed. In November last year, she urged Congress to ban crypto in retirement accounts.