On June 15, Attorney General Letitia James announced the prohibition of Hong Kong-based cryptocurrency exchange, CoinEx, from conducting operations in New York. The exchange has been accused of neglecting to register as a securities and commodities brokerage, resulting in the confiscation of approximately $1.7 million worth of its funds.
Through the resolution of a prior lawsuit, CoinEx has addressed allegations brought against it by the New York attorney general in February. The attorney general had accused the exchange of misrepresenting itself as a legitimate platform and failing to comply with the required registration process with the local authorities.
According to the announcement, as part of the current consent order, CoinEx is subject to a ban on engaging in the offering, sale, or purchase of securities and commodities in New York. Additionally, the exchange is prohibited from providing access to its platform within the state.
Under the terms of the agreement, a total of $1.1 million is set to be refunded to 4,691 investors based in New York. Furthermore, the state will receive over $600,000 in penalties as part of the settlement.
In addition to the aforementioned measures, CoinEx is required to enforce geo-blocking measures to restrict access from IP addresses originating in New York.
Furthermore, the exchange is strictly prohibited from creating new accounts for customers residing in the United state.
In the announcement, Attorney General Letitia James emphasized the significance of the agreement as a stern message to cryptocurrency companies, cautioning them about the severe repercussions of disregarding the laws in New York. She asserted that her office remains a committee to take strong action against crypto companies that blatantly flout the law, deceive investors, and jeopardize the well-being of New Yorkers.
During the next 90 days, CoinEx users will have the opportunity to reclaim their cryptocurrency funds directly from the exchange. After the designed timeframe, eligible investors can initiate the process to receive funds in fiat currency by sending an email to coinexrefund@ag.ny.gov.
As outlined in the announcement, investors will be reimbursed with either cryptocurrency or cash equivalents based on the holdings in their accounts as of April 25, 2023.
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