New York has joined the SEC in cracking down on crypto exchanges, marking a significant step in the ongoing battle to regulate the crypto market. In a landmark move, the state has banned CoinEX Exchange, accusing it of falsely representing itself as a legitimate crypto exchange. The authorities didn’t stop there; they also seized a staggering $1.7 million in crypto assets. This decisive action sends a clear message to other crypto platforms: transparency and honesty are non-negotiable in the Empire State’s financial landscape.
CoinEx Faces Legal Action From NY Regulators
The CoinEx Exchange, once a bustling hub for crypto enthusiasts, now stands accused of misleading its users about the nature of its operations. The New York State Department of Financial Services (NYDFS) found that the platform was not, in fact, a licensed crypto exchange, but rather a front for other, less scrupulous activities. The findings resulted in the immediate ban of CoinEx from operating within the state.
In a resolution to the lawsuit filed by New York State Attorney General Letitia James, CoinEx has consented to a settlement involving a $1.8 million payment and a ban on its operations within the state. The lawsuit alleged that the cryptocurrency exchange was operating unlawfully due to its failure to register with the state.
The proposed settlement, which awaits a judge’s approval, was submitted to a Manhattan state court on Wednesday. The terms of the settlement stipulate that CoinEx is prohibited from offering, selling, or buying securities and commodities in New York, as well as from making its platform accessible within the state.
The settlement amount of $1.8 million comprises $1.17 million in refunds to 4,691 investors. This refund amount may be reduced if investors choose to withdraw their crypto assets during a specified 90-day period. The remaining $626,000 is to be paid as a fine.
Today’s Agreement Should Serve As A Warning To Crypto Companies: NY
Despite agreeing to the settlement, CoinEx, also known as Vino Global Ltd, did not acknowledge any wrongdoing. The cryptocurrency platform, based in Hong Kong, was established in 2017.
Attorney General James said:
“Unregistered crypto platforms pose a risk to investors, consumers, and the broader economy. Today’s agreement should serve as a warning to crypto companies that there are hefty consequences for ignoring New York’s laws.”
CoinEx and its legal representation did not immediately respond to requests for comments made on Thursday.
In February, James sued CoinEx for not registering before trading tokens like AMP, LBRY, LUNA, and Rally, violating the Martin Act. This lawsuit is part of her wider effort to control elusive crypto companies.
U.S. Securities and Exchange Commission Chair, Gary Gensler, has also targeted the crypto industry. Recently, the SEC sued leading crypto platforms Binance and Coinbase for allegedly operating as exchanges without the necessary registration.
