New York Sues Cryptocurrency Company CoinEx For Failing To Register

CoinEx has been sued by the New York attorney general's office for failing to register as a securities and commodities broker-dealer and misrepresenting itself as a cryptocurrency exchange, according to the attorney general's office.

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On the website of CoinEx, which was founded in 2017, the company describes itself as a "professional global cryptocurrency exchange". Through its website and app, investors could trade digital assets such as bitcoin and Luna, as well as other digital assets. However, according to New York state law, CoinEx isn't registered with the U.S. Securities and Exchange Commission or designated by the Commodity Futures Trading Commission as an exchange. 

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Despite the fact that CoinEx isn't registered in the state of New York, the office of New York Attorney General Letitia James said the state's prosecutors were also able to buy and sell crypto on CoinEx in New York, even though the company isn't registered in that state. To be able to conduct business in the state of New York, securities and commodities brokers must be registered with the state. 

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CoinEx is being sued by the prosecutors for falsely representing itself as an exchange, preventing it from operating in New York, and using geolocation tools based on IP addresses to prevent access to its app, website, and services from New York.

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Despite an inquiry for comment from CoinEx, representatives did not immediately respond to the request.

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This lawsuit was announced on Wednesday and is the latest action that the New York attorney general has taken to police the crypto sector and use the state's laws to protect the interests of investors.

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There has been a lawsuit filed in recent months by Ms. James' office against the former chief executive of the now-bankrupt cryptocurrency lender Celsius Network LLC charged with defrauding investors of their money. As part of the settlement, the company has also reached a nearly $1 million settlement with crypto platform BlockFi Lending LLC for offering unregistered securities through its platform. Her office warned New Yorkers last year about the risks associated with investing in crypto assets. 

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It has also been advised by the attorney general's office of the state of New York to report issues that are related to deceptive conduct in the crypto market. In addition, those who are employed in the crypto sector are urged to blow the whistle on any misconduct or fraud they may have witnessed in their work environment.