New York State Attorney General Letitia James has filed a lawsuit against KuCoin, a Seychelles-based crypto exchange, alleging that it is violating securities laws by offering tokens, including ether, without registering with the attorney general’s office. This is the first time a regulator has claimed in court that ether is a security, though the SEC Chairman Gary Gensler has hinted that his agency might consider ether to be a security, while the CFTC has long maintained that both bitcoin and ether are commodity assets. The lawsuit is a reminder that crypto exchanges must comply with securities laws and regulations in order to operate legally.
The New York Attorney General’s office has filed a lawsuit against cryptocurrency exchange Bitfinex and its affiliated stablecoin issuer Tether, alleging that the companies have violated the Martin Act, a 102-year-old anti-fraud law. The suit claims that the value of ether, the luna (LUNA) token and terraUSD (UST) stablecoin, all traded on the exchange, are securities and that the companies have failed to register them as such. The lawsuit has caused the price of ETH to drop 8%, with the broader crypto market also taking a hit. The case is likely to have a major impact on the cryptocurrency industry, as it could set a precedent for how securities laws are applied to digital assets.
The New York Attorney General’s office has filed a petition against KuCoin, a cryptocurrency exchange, for selling unregistered securities. The petition argues that Ethereum, Luna, and UST are speculative assets that require third-party developers to provide profit to holders, and that KuCoin was required to register before selling them. The NYAG’s office was able to create a KuCoin account using a computer with a New York-based IP address to buy and sell digital tokens, and deposit tokens into the KuCoin Earn product for a fee. KuCoin has not responded to subpoenas filed by the NYAG’s office. The NYAG is seeking to have KuCoin register as a broker-dealer, investment adviser, or other financial services provider.
The New York Attorney General’s Office has filed a lawsuit against cryptocurrency exchange KuCoin for operating without proper registration. The lawsuit seeks to stop KuCoin from representing itself as an exchange, prevent the company from operating in New York and direct KuCoin to implement geo-blocking to prevent access from New York. This is not the first time KuCoin has been accused of illegal activities, as South Korean and Dutch regulators have also made similar allegations. The NYAG’s office is hoping to protect New York investors from potential fraud and other risks associated with unregistered exchanges.
