Attorney General Letitia James has issued a ban on the operations of Hong Kong-based crypto exchange CoinEx in New York. An announcement on June 15 revealed that approximately $1.7 million worth of funds belonging to CoinEx had been seized due to the exchange’s alleged failure to register as a securities and commodities brokerage.
This latest development resolves a lawsuit filed against CoinEx in February by the New York attorney general, who accused the exchange of misrepresenting itself as a legitimate trading platform and neglecting to register with local authorities.
The announcement stated, “As part of today’s consent order, CoinEx is banned from offering, selling or purchasing securities and commodities in New York and is prohibited from making its platform available in the state.”
Under the terms of the agreement, approximately $1.1 million will be returned to 4,691 investors from New York, while over $600,000 will be paid in penalties to the state.
🚨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
CoinEx is also required to implement measures, such as geo-blocking, to prevent New York IP addresses from accessing its platform. Furthermore, the exchange is strictly prohibited from opening new accounts for customers in the United States.
Attorney General James emphasised, “Today’s agreement should serve as a warning to crypto companies that there are hefty consequences for ignoring New York’s laws. My office will continue to crack down on crypto companies that brazenly disregard the law, mislead investors and put New Yorkers at risk.”
CoinEx users can reclaim their cryptocurrency funds directly from the exchange within the next 90 days. After this period, eligible investors can request fiat currency refunds by contacting [email protected]. The announcement specified that investors would be reimbursed with either cryptocurrency or equivalent cash holdings as of April 25, 2023.
CoinEx was taken to court by Attorney General James in the New York Supreme Court on February 22 with allegations of engaging in persistent fraudulent practices and violating the state’s stringent Martin Act, among the nation’s most comprehensive anti-fraud laws. The complaint lodged by James categorised several tokens, including Amp, LBRY Credits, Rally, and Terra, as commodities and securities.