Cryptocurrency exchange CoinEX will cease operations in New York after agreeing to pay $1.7 million in compensation to the New York Attorney General’s Office (NYAG). The Hong Kong-based exchange has also been ordered to refund investors’ money.
CoinEX has been accused by New York Attorney General Letitia James of failing to register as a securities and commodities broker and a dealer for allegedly presenting itself as a crypto exchange. NYAG first sued the exchange in February.
Detailing the settlement, NYAG said CoinEX will set aside $1.1 million of the agreed amount to recover thousands of investors, with a $600,000 penalty to be paid to New York. The attorney general’s office added that CoinEX agreed to pay refunds within three months for amounts withheld as of April 25. James described the settlement as a warning to other crypto companies.
“Unregistered crypto platforms pose risks to investors, consumers and the broader economy,” said Attorney General James. She added, “Today’s agreement should serve as a warning to cryptocurrency firms that there are dire consequences for ignoring New York laws.”
According to James, CoinEx boasts the Martin Act, a law created in 1921 and considered one of the most stringent anti-fraud regulations in the United States. The law prohibits the sale or purchase of securities and commodities without registration.
Moreover, CoinEX has been banned from creating new accounts for US clients, but existing clients can withdraw their cryptocurrencies from the platform. The exchange must also implement geo-blocking to prevent new New York IP addresses from accessing its web and app trading platforms.
New York cryptocurrency laws
CoinEX is not the only exchange facing enforcement action from New York attorney general. Attorney General James received $4.3 million in May from Coin Cafe, a Brooklyn-based cryptocurrency company. Similarly, in March, the authority filed charges against KuCoin.
In total, the NYAG has recovered $500 million from the cryptocurrency industry amid efforts to increase oversight and regulations in the sector, the authority said in the statement. The attorney general also expressed his intention to propose a bill to state legislators to regulate digital assets.
Cryptocurrency exchange CoinEX will cease operations in New York after agreeing to pay $1.7 million in compensation to the New York Attorney General’s Office (NYAG). The Hong Kong-based exchange has also been ordered to refund investors’ money.
CoinEX has been accused by New York Attorney General Letitia James of failing to register as a securities and commodities broker and a dealer for allegedly presenting itself as a crypto exchange. NYAG first sued the exchange in February.
Detailing the settlement, NYAG said CoinEX will set aside $1.1 million of the agreed amount to recover thousands of investors, with a $600,000 penalty to be paid to New York. The attorney general’s office added that CoinEX agreed to pay refunds within three months for amounts withheld as of April 25. James described the settlement as a warning to other crypto companies.
“Unregistered crypto platforms pose risks to investors, consumers and the broader economy,” said Attorney General James. She added, “Today’s agreement should serve as a warning to cryptocurrency firms that there are dire consequences for ignoring New York laws.”
According to James, CoinEx boasts the Martin Act, a law created in 1921 and considered one of the most stringent anti-fraud regulations in the United States. The law prohibits the sale or purchase of securities and commodities without registration.
Moreover, CoinEX has been banned from creating new accounts for US clients, but existing clients can withdraw their cryptocurrencies from the platform. The exchange must also implement geo-blocking to prevent new New York IP addresses from accessing its web and app trading platforms.
New York cryptocurrency laws
CoinEX is not the only exchange facing enforcement action from New York attorney general. Attorney General James received $4.3 million in May from Coin Cafe, a Brooklyn-based cryptocurrency company. Similarly, in March, the authority filed charges against KuCoin.
In total, the NYAG has recovered $500 million from the cryptocurrency industry amid efforts to increase oversight and regulations in the sector, the authority said in the statement. The attorney general also expressed his intention to propose a bill to state legislators to regulate digital assets.