- Hong Kong-based crypto exchange, CoinEx, is banned from operating in New York.
- The crypto entity had to pay a hefty fine for operating in the state without meeting registration requirements.
New York Attorney General Letitia James has announced that the agency has recovered more than $1.7 million from the crypto exchange – CoinEx. The crypto platform, based in Hong Kong, was penalized by the government agency for operating without registration in the state.
Notably, it is the same agency that labeled Ethereum [ETH]the second largest cryptocurrency, as security in a lawsuit against Kucoin.
Read Ethereum’s [ETH] Price Forecast 2023-24
CoinEx has misrepresented itself as a crypto exchange
The NYAG sued the crypto exchange in February 2023. The main reason was not registering as a stock and commodities broker-dealer. The AG also held CoinEX responsible “for falsely representing itself as a crypto exchange.”
In New York, any company recognized as an exchange must be registered with the SEC or CFTC. In addition, the Attorney General had in this case labeled LUNA, LBC, RLY and AMP as securities and commodities.
The June 15 announcement stated that the Hong Kong-based crypto entity will be banned from operating in New York. In addition, CoinEx must pay back more than $1.1 million to New York customers. And the refund process must be completed within the next 90 days. The crypto company must also pay a fine of more than $600,000 to New York. The press release further said,
“In addition, CoinEx must implement geo-blocking to prevent New York IP addresses from accessing their platform. CoinEx is also prohibited from creating new accounts for US customers and existing US customers can only withdraw their crypto from the platform.
Notably, the state authority has previously sued other entities for operating in the region for lack of regulatory compliance. This includes the crypto platform Nexo, which operated in the region by lying to customers about registration status.
The court case resulted in the NYAG seizing nearly $24 million. In addition, the crypto entity is not allowed to operate in the region for at least 5 years.
