Benzinga - CoinEx was hit by a lawsuit on Wednesday by New York Attorney General Letitia James for allegedly conducting business without proper registration in the state of New York.
What Happened: In a petition submitted to a New York state court in Manhattan, James alleged that CoinEx "engaged in repeated and persistent fraudulent practices."
The petition alleged that CoinEx listed tokens and services which qualify as securities and/or commodities under state law, referencing New York's Martin Act and General Business Law as evidence of this qualification.
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"The Tokens each fall within the Martin Act’s definition of commodities, which includes any foreign currency and any other good, article, or material," the filing said. "CoinEx is engaged in the business of selling and offering to sell commodities through accounts, agreements, or contracts to accounts in New York primarily for investment purposes. The Tokens are also securities under the Martin Act because they represent investments of money in common enterprises with profits to be derived primarily from the efforts of others."
Why It Matters: James alleged that CoinEx, without receiving authorization from any government, presented itself as an international cryptocurrency "exchange," and failed to respond to her subpoena demanding information regarding its digital asset trading activities last month.
"The days of crypto companies like CoinEx acting like the rules do not apply to them are over," James said in a statement.
In September 2022, James said New York was filing a lawsuit against Donald Trump, which alleges that his self-reported net worth is exaggerated.
CoinEx did not respond to Benzinga's request to comment at the time of writing.
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