Cryptocurrency exchange CoinEx was sued by New York Attorney General Letitia James, who alleged that the firm misrepresented itself as an exchange by failing to register as a securities and commodities trader with the state.
38 pages petition filed by James in New York Supreme Court on February 22 alleging CoinEx “engaged in repeated and persistent fraudulent practices” and violations Martin’s law of the state — considered one of the strictest anti-fraud and securities regulation laws in the United States.
She also claimed that CoinEx listed various tokens that qualified as “both commodities and securities” and named Amp (AMP), LBRY Credits (LBC), Rally (RLY) and Terra (MOON).
When crypto platforms don’t respect our laws, they put New Yorkers at risk.
We are trying to stop @coinexcom since operating in New York and will continue to protect people from the dangers of the cryptocurrency industry.
— NY AG James (@NewYorkStateAG) February 22, 2023
On February 22 declarationJames said that CoinEx is not registered Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) “as required under New York law” to sell tokens.
The Attorney General’s Office created a CoinEx account with based in New York computer and internet address and claimed that he was able to trade on the platform.
“The days when crypto companies like CoinEx acted like the rules didn’t apply to them,” she added.
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The petition also states that CoinEx failed to comply with a subpoena dated December 22, 2022 sent by the Attorney General’s Office to “provide testimony regarding its platform’s virtual asset trading activities.”
“CoinEx was subpoenaed to appear for an examination under oath on January 9, 2023 and failed to appear […] CoinEx not showing up is prima facie evidence that CoinEx has engaged in [mentioned] fraudulent practices.”
In the petition, James is seeking an injunction to stop CoinEx marketing itself as an exchangeprevent it from operating in the state and order the exchange to geoblock Internet addresses and GPS location data originating from New York.
Cointelegraph contacted CoinEx for comment but did not receive an immediate response.