New York Attorney General Letitia James filed a civil lawsuit against CoinEx, accusing the cryptocurrency exchange of conducting business illegally because it had not registered with the state.
What CoinEx is accused of
The complaint was submitted to a court in the state of New York located in Manhattan on Feb. 24. Before beginning to trade tokens, and the firm was accused of participating in fraudulent operations, failing to register as a commodities broker-dealer, securities broker, or securities dealer, and breaching the Martin Act, which is a significant state legislation that is used to combat financial fraud.
The case also brought attention to the fact that CoinEx misrepresented itself as a worldwide cryptocurrency exchange without having obtained approval from the state. Moreover, CoinEx did not comply with a subpoena that requested testimony about its actions in trading digital assets.
James said that the time has come to put an end to cryptocurrency corporations like CoinEx behaving as though the regulations do not apply to them. The business has not provided a response to the charges as of the time this article was written.
CoinEx, which was established in 2017, has its headquarters in Hong Kong and is also known as Vino Global Ltd. The action filed by the Attorney General demands both compensation and a prohibition on New York residents’ access to the mobile app, website, and services offered by CoinEx.
New York clamps down on another exchange
In related news, the U.S. Securities and Exchange Commission and New York’s top financial regulator have objected to the $1 billion deal by Binance.US, world’s largest cryptocurrency exchange, to buy bankrupt crypto lender Voyager.
The SEC stated that the Voyager deal could violate laws on the unregistered offer and sale of securities. The agency also cited concerns over the security of assets at Binance.US, saying that the planned deal did not provide sufficient information on whether third parties, including other Binance affiliates or foreign persons or entities, would have access to customers’ digital wallets’ keys.
Both the top financial regulator in New York and the state’s Attorney General James were opposed to the Voyager purchase, with the former noting the fact that Voyager ran an unlicensed unlawful company dealing in virtual currencies under the latter’s jurisdiction.
CoinEx and the Binance exchange.US are among the various crypto companies that are currently being investigated by regulatory authorities in the United States.
As cryptocurrency use continues to grow, the Attorney General and the Securities and Exchange Commission have taken action against these companies, which may indicate that the regulatory climate is growing more stringent.
The response from authorities is a reflection of the rising worries that policymakers have over the potential for the highly unregulated cryptocurrency industry to be exploited for fraudulent operations, money laundering, and supporting terrorist organizations.
The legal action taken by the Attorney General against CoinEx and the concerns raised about Binance It’s possible that this arrangement may mark the beginning of increased regulatory monitoring in the cryptocurrency sector.