CoinEx Banned From Operating In New York, Funds Of IDR 25.3 Billion Confiscated For Securities Violations

JAKARTA - Hong Kong-based crypto exchange CoinEx was banned from operating in New York by Attorney General Letitia James. According to an announcement on June 15, more than US$1.7 million (Rp25.3 billion) the exchange fund value was confiscated because CoinEx allegedly failed to register as a securities and commodity brokerage company.

The agreement lifted previous charges against CoinEx filed by New York's Attorney General in February, when CoinEx was accused by attorney general of spuriously describing itself as an exchange and failing to register with local authorities.

"As part of today's approval order, CoinEx is prohibited from offering, selling, or buying securities and commodities in New York and is prohibited from making its platform available in the state," the announcement reads, quoted by Cointelegraph.

According to the agreement, more than 1.1 million US dollars (Rp14.4 billion) will be returned to 4,691 New York investors, and more than 600,000 US dollars (Rp8.9 billion) will be paid as fines to the state.

There are serious consequences for those who ignore the law in New York.

Sebagai hasil dari gugatan kami, platform kripto @coinexcom dilarang beroperasi di New York dan negara lainnya dan akan membayar $1,7 juta dolar sebagai denda dan pengembalian dana bagi warga New York yang terkena dampak. https://t.co/U3wkdfHu3o

- NY AG James (@NewYorkStateAG) June 15, 2023 In addition, CoinEx must implement geographical blocking to prevent access by New York's IP address. CoinEx is also prohibited from creating new accounts for US customers.

"Today's agreement should serve as a warning to crypto companies that there are grave consequences for those who ignore the law in New York. My office will continue to crack down on crypto companies that bravely ignore the law, mislead investors, and threaten New Yorkers," James said in the announcement.

CoinEx users will be able to retrieve crypto funds directly from the exchange over the next 90 days. After this period, eligible investors will be able to receive funds in fiat currency by sending emails to coinexrefund@ag.ny.gov. According to the announcement, investors will get crypto returns or cash equivalents held in accounts as of April 25, 2023.

CoinEx was brought to court by James at the New York High Court on February 22 on charges of involvement "in repeated and persistent fraud practices" and in violation of the state's Martin Act, one of the country's most stringent anti-fraud laws. In the lawsuit, James classified various tokens as "commodities and securities," including Amp (AMP), LBRY Credits (LBC), Rally (RLY), and Terra (LUNA).

CoinEx is suspected of committing repeated fraudulent practices and violating the state's Martin Act by calling some tokens a commodity and securities. James sued CoinEx for the move at the New York High Court on February 22.