- New York Attorney General settles with CoinEx.
- Nearly $2 million will be refunded to customers.
- CoinEx was forced to implement geoblocking measures and has been prohibited from continuing to operate in NYS.
Notorious anti-crypto head, Letitia James, the New York State Attorney General, has successfully settled with crypto exchange CoinEx, refunding over $1.7 million to investors in New York and imposing penalties on the company. The settlement, announced by James’ office, also includes a ban on CoinEx’s operations within the state.
CoinEx’s Violations and Refunds
CoinEx faced allegations of failing to register as a securities and commodities broker-dealer and falsely presenting itself as a crypto exchange. As part of the settlement, CoinEx must refund more than $1.1 million to numerous investors in New York.
These refunds will be provided in cryptocurrency directly by CoinEx within 90 days. After this timeframe, eligible investors can receive their refunds in U.S. currency from the Office of the Attorney General (OAG).
Prohibition and Implementation of Geoblocking Measures
To prevent CoinEx from offering, selling, or purchasing securities and commodities in New York, the settlement imposes a ban on the company’s operations within the state. CoinEx is also mandated to implement geoblocking measures to ensure that individuals with New York IP addresses cannot access their platform.
Moreover, CoinEx is prohibited from creating new accounts for customers in the United States, while existing U.S. customers can only withdraw their cryptocurrency holdings from the platform.
Prior Actions and Ongoing Enforcement
CoinEx is not the first crypto firm to face legal action from the New York Attorney General’s office. Previous cases include the lawsuit against KuCoin, a crypto exchange, for failing to register with the state.
Notably, this action marked the first instance of a regulatory official referring to ether as a security in the United States. Additionally, the office has pursued other crypto entities, such as Coin Cafe, a crypto trading platform, which was ordered to repay $4.3 million to users for charging undisclosed fees.
Conclusion
The settlement between the New York Attorney General’s office and CoinEx underscores the severe consequences of non-compliance regarding regulatory requirements within the cryptocurrency industry.
CoinEx’s failure to register as a securities and commodities broker-dealer and its misrepresentation as a crypto exchange has resulted in substantial refunds for investors in New York, accompanied by penalties imposed on the company. As New York continues its enforcement actions and implements comprehensive cryptocurrency regulations, investors can expect heightened protection and oversight in the state.
