Cryptocurrency firm CoinEx recently reached a settlement with New York Attorney General Letitia James, compelling the company to refund more than $1.7 million to thousands of New York investors and pay penalties to the state. Furthermore, CoinEx is now banned from operating in New York, as indicated by a statement from James’ office.
James warned other crypto companies that they may face similar repercussions for failing to comply with New York laws. She emphasized her commitment to crack down on crypto firms that misrepresent their activities, mislead investors, and put New Yorkers at risk.
The CoinEx lawsuit, filed in February, accused the company of failing to register with the state of New York and falsely representing itself as a crypto exchange. Additionally, James claimed that cryptocurrencies AMP, LUNA, LBC, and $RLY were securities and commodities.
Last month, James announced legislation that would mandate customer refunds and audits of cryptocurrency exchanges. The proposed bill aims to establish the most comprehensive set of regulations on cryptocurrency across the nation. New York has already implemented stringent regulations, such as the BitLicense—a business license that permits regulated virtual currency activities.
Other crypto firms have faced regulatory actions, including KuCoin, which was taken to court in March for allegedly failing to register with the state. Notably, James labeled ether as a security in the KuCoin case, marking the first time a regulatory official in the US has referred to ether as a security.
Former CEO of crypto lender Celsius, Alex Mashinsky, also faced allegations of misleading investors about the company’s financial health. It is worth noting that Celsius filed for bankruptcy in July. In a separate case, James’ office ordered Coin Cafe to repay $4.3 million to users for charging hidden fees. As part of the settlement, Coin Cafe agreed to compensate the affected parties, including 340 investors in New York.
Though the ongoing crackdown on crypto firms that fail to comply with state regulations may initially seem harsh, it aims to protect investors and ensure transparency and safety within the blockchain and cryptocurrency market. Ensuring that companies adhere to state guidelines will ultimately bolster trust in the market and attract more investors. However, skepticism arises when considering how these regulations may stifle innovation within the rapidly growing blockchain and cryptocurrency ecosystem. Striking a balance between regulation and innovation will be crucial for the future of the industry.
Source: Cryptonews
