CoinEx Exchange Banned In New York, Authorities Recover $1.7 Million

In a groundbreaking move, Attorney General Letitia James has issued a ban on CoinEx, a prominent Hong Kong-based cryptocurrency exchange, effectively prohibiting its operations within the state of New York. The decision comes on the heels of a startling announcement made on June 15, revealing that the exchange’s funds, which amount to over $1.7 million, were seized due to alleged violations.

The seizure was prompted by accusations that CoinEx had failed to comply with regulatory requirements in the United States, specifically regarding its registration as a securities and commodities brokerage. In response, a proposed settlement has been filed in a Manhattan state court, awaiting the judge’s approval.

This settlement aims to establish clear terms and conditions for CoinEx, ensuring that the exchange refrains from offering, selling, or purchasing securities and commodities within New York. Additionally, CoinEx is strictly prohibited from granting access to its platform to individuals residing in the state. The proposed settlement serves as a comprehensive solution to the regulatory challenges associated with CoinEx’s operations and paves the way for the resolution of this legal conflict.

Once the settlement receives the judge’s approval, its terms will be finalized and diligently enforced. As part of the proposed agreement, CoinEx will be required to make a payment that consists of several key components, each addressing different aspects of the alleged violations and providing restitution to affected parties.

To begin, a substantial amount of $1.17 million will be allocated to refund a total of 4,691 investors. It is important to note, however, that if any of these investors choose to withdraw their cryptocurrency within a specified 90-day period, the refund amount may be subject to reduction. This provision encourages a swift resolution and protects the integrity of the proposed settlement.

In addition to the refund, CoinEx will face a financial penalty of $626,000. This fine serves both as a deterrent for future non-compliance and as a measure to address the alleged violations. By imposing a monetary penalty, the settlement emphasizes the importance of adhering to regulatory standards while providing a fair outcome for affected investors.

While CoinEx has agreed to the terms of the settlement, the exchange does not admit any wrongdoing with respect to the alleged violations. It is worth mentioning that CoinEx is also known as Vino Global Ltd., reflecting the global nature of its operations.

Expressing her stance on the matter, Attorney General Letitia James asserts, “Today’s agreement should serve as a warning to crypto companies that there are hefty consequences for ignoring New York’s laws. My office will continue to crack down on crypto companies that brazenly disregard the law, mislead investors, and put New Yorkers at risk.” Her unwavering commitment to upholding the law underscores the importance of accountability within the cryptocurrency industry.

This legal battle commenced in February, when Attorney General Letitia James filed a lawsuit against CoinEx, alleging violations of the Martin Act—a state law designed to combat financial fraud. The lawsuit specifically accused CoinEx of engaging in the buying and selling of tokens, including AMP, LBRY, LUNA, and Rally, without the necessary registration.

Attorney General Letitia James’s decisive actions and commitment to protecting investors have sent shockwaves through the cryptocurrency community. This ban on CoinEx serves as a resounding message that New York’s laws must be respected and adhered to by all players in the crypto space. As the state’s regulatory framework evolves, it is crucial for cryptocurrency exchanges to proactively comply with the law, safeguarding the interests of investors and contributing to the industry’s long-term growth.