Attorney General Letitia James has banned the Hong Kong-based cryptocurrency exchange CoinEx from operating in New York.
The exchange had its cash, totaling over $1.7 million, seized for allegedly not registering as a securities and commodities brokerage. CoinEx resolved a previous legal dispute that began in February when the state of New York accused it of misrepresenting itself as an exchange and failing to register with local authorities.
The ban prohibits CoinEx from providing, selling, or buying securities and commodities in New York. Additionally, it prevents the platform from being accessible to residents of the state.
As part of the agreement, the authorities will return more than $1.1 million to 4,691 New York investors. They will also impose fines totaling over $600,000 on the state.
CoinEx required to implement geo-blocking and account restrictions
CoinEx is also required to implement geo-blocking to prevent access from New York IP addresses and is not allowed to open new accounts for clients in the United States.
Attorney General James emphasized that cryptocurrency companies should be aware of the severe consequences of violating New York’s laws. These consequences include fraudulent practices and endangering investors.
Over the next 90 days, CoinEx users will have the opportunity to retrieve their cryptocurrency funds from the exchange. After this period, eligible investors can request a refund in fiat currency by emailing [email protected].
The refund will cover the value of cryptocurrency or cash equivalents held in their accounts as of April 25, 2023, according to the statement. On February 22, Attorney General James filed a lawsuit against CoinEx in the New York Supreme Court. The lawsuit alleges repeated fraudulent practices and violation of the Martin Act, one of the strictest anti-fraud statutes in the country.
The lawsuit listed several tokens, including Amp (AMP $0.00), LBRY Credits (LBC), Rally (RLY), and Terra (LUNA $0.58), as both commodities and securities.
