CoinEx, a crypto exchange complies with New York ban, settles attorney general lawsuit

CoinEx has reached an agreement to pay $1.8 million and face a ban on operating in New York as part of a settlement with State Attorney General Letitia James. The lawsuit accused the cryptocurrency exchange of illegal operations due to its failure to register with the state.

The proposed settlement was submitted to a New York state court in Manhattan and is awaiting judicial approval.

According to the terms, CoinEx will be prohibited from engaging in the sale, purchase, or offering of securities and commodities in New York, and its platform will no longer be accessible to users in the state.

The payment includes $1.17 million in refunds to 4,691 investors, which may be adjusted if they withdraw their crypto assets within a specified 90-day period, along with a $626,000 fine.

CoinEx did not admit any wrongdoing as part of the settlement. CoinEx, also known as Vino Global Ltd, is a Hong Kong-based platform founded in 2017.  James, in a statement 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.”

Back in February, State Attorney General Letitia James filed a lawsuit against CoinEx, alleging that the platform violated the Martin Act, a potent state law aimed at combating financial fraud. According to James, CoinEx failed to register before engaging in the buying and selling of tokens such as AMP, LBRY, LUNA, and Rally.

This case is part of Attorney General James’ ongoing efforts to regulate and control what she refers to as “shadowy” cryptocurrency companies.

Gary Gensler, the chairperson of the U.S. Securities and Exchange Commission (SEC), has also directed his attention towards the cryptocurrency industry.

Recently, the SEC filed lawsuits against Binance, the largest cryptocurrency platform, and Coinbase, the largest U.S.-based cryptocurrency platform. The lawsuits claimed that both platforms operated as exchanges without registering with the regulatory agency.