New York Attorney General's Office sues CoinEx, demands blocking of New York state IP addresses and surrender of trading fees
According to the announcement from the Office of the Attorney General (OAG) and the legal documents, the New York State Attorney General's Office has filed a lawsuit against the cryptocurrency exchange CoinEx, alleging that it failed to register under state law and offered tokens such as AMP, LBC, LUNA, RLY on its platform that were deemed unregistered securities.
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Violation of New York Martin Act
It is pointed out that CoinEx has not registered with the U.S. Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), or regulatory agencies in New York. However, the Attorney General's office was able to register and trade on the CoinEx platform through a computer with a New York IP address, and CoinEx was able to charge transaction fees for this, which violates the New York Martin Act.
Note: The Martin Act was proposed by New York State Assemblyman Louis M. Martin in 1921, granting broad enforcement powers to the New York Attorney General to investigate securities fraud.
Blocking New York IP Addresses and Surrendering Transaction Fees
Attorney General Letitia James has requested CoinEx to block access from New York users to the CoinEx website, app, and related services based on New York IP addresses and GPS locations.
Other allegations include CoinEx teaching users how to earn passive income through its blog. The document also demands that CoinEx account for all transaction fees from New York users and surrender them in full.
Regarding tokens such as AMP, LBC, LUNA, RLY, the Attorney General's office stated:
These tokens are heavily promoted as having profit potential, mainly depending on the project's growth, which in turn depends on the efforts of the project founders and team. These individuals make investors believe that their efforts can bring token holders substantial profits, therefore classifying the tokens as securities.
CoinEx has not responded to these allegations.