Cryptocurrency exchange Coinex has reached a settlement with the New York State Attorney General, Letitia James, as announced in a press release on June 15. The settlement requires Coinex to pay $1.7 million in penalties and refunds and prohibits the exchange from operating in the state of New York. In response, Coinex has also announced its decision to withdraw from the entire US market.
The legal battle between Coinex and the Attorney General began in late February 2023 when Letitia James filed a lawsuit against the exchange. The lawsuit alleged that Coinex offered unregistered securities and operated as an unregistered exchange. The Attorney General’s Office discovered that unregistered securities were accessible from Coinex within New York.
After a little over three months, Coinex has now agreed to the settlement terms, which include the financial penalties and the prohibition of operating in New York. In addition, the exchange has made the strategic decision to exit the entire US market. Letitia James emphasized that the primary focus of her office is to protect investors in New York, and she hopes that this settlement serves as a deterrent for other crypto companies.
Letitia James stated, “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. My office will continue to crack down on crypto companies that brazenly disregard the law, mislead investors, and put New Yorkers at risk.”
This settlement follows a similar approach taken by the Attorney General’s Office in March when they filed a lawsuit against Kucoin. The state’s chief law enforcement officer also classified ethereum (ETH) as an unregistered security in that case. Additionally, in May, the Attorney General’s Office successfully obtained $4.3 million from Coin Cafe, a Brooklyn-based crypto firm, for deceptive practices towards investors.
The actions taken by Letitia James and her office align with the heightened enforcement efforts initiated by the US Securities and Exchange Commission (SEC) during the same period. The regulatory crackdown on crypto companies aims to ensure compliance with laws and protect investors in an evolving and rapidly growing industry.
