CoinEx crypto exchange is being asked to block all internet addresses originating from New York by the New York Attorney General, who is requesting a court order to have it removed from the state.
In a lawsuit filed by the attorney general of New York, Letitia James alleges that cryptocurrency exchange CoinEx misrepresented itself as an exchange by failing to register as a securities and commodities broker-dealer.
James said CoinEx “engaged in repeated and persistent fraudulent acts” and breached the Martin Act, which is one of the nation’s most anti-fraud and securities regulation laws, in a 38-page petition submitted to the New York Supreme Court on February 22.
She also claimed that CoinEx listed a number of tokens that met the criteria for “both commodities and securities,” mentioning Amp, LBRY Credits (LBC), Rally (RLY), and Terra.
I'm suing cryptocurrency platform @coinexcom for illegally operating in New York without registering with the state.
⏰Wake-up call: crypto platforms must play by the same set of rules as everyone else.
— NY AG James (@NewYorkStateAG) February 22, 2023
In a statement on February 22, James claimed that “as is required by New York law,” CoinEx is not registered with the Securities and Exchange Commission or the Commodities Futures Trading Commission to sell the tokens.
The Attorney General’s Office allegedly claimed it was able to trade on the platform after setting up a CoinEx account with a computer and IP address located in New York.
The day when cryptocurrency firms like CoinEx assumed that the law did not apply to them was over, she continued.
Additionally, the petition claims that CoinEx violated an Attorney General’s Office subpoena issued on December 22 asking it to “give testimony regarding the virtual asset trading activities of its platform.”
On January 9, 2023, CoinEx was required by subpoena to present for an examination under oath but failed to do so. The absence of CoinEx serves as conclusive evidence that CoinEx has participated in the above mentioned fraudulent activities.
James is asking the court to compel CoinEx to geoblock IP addresses and GPS location data originating from New York in order to prevent it from advertising itself as an exchange and from conducting business there.