CoinEx, a cryptocurrency exchange based in Hong Kong, has reached a settlement with the office of the New York Attorney General after facing a lawsuit for illegal operations in February 2023. As per the agreement, CoinEx will pay a sum exceeding $1.7 million and will be prohibited from offering its services in New York. The recovered funds will be utilized for penalties and refunds to investors in New York.
In an official press release by the New York Attorney General’s (NYAG) office, CoinEx has agreed to reimburse more than $1.1 million to over 4,600 investors in New York. Additionally, they will pay $600,000 in penalties to the state of New York. The refund process will be completed within the next 90 days, allowing users to receive their refunds directly in cryptocurrency from the exchange.
CoinEx a Stepping Stone Towards Tougher Crypto Regulations
The agreement between CoinEx and the NYAG’s office also entails several restrictions. CoinEx is prohibited from engaging in the offering, selling, or buying of securities and commodities in New York. Moreover, the company is forbidden from opening new accounts for U.S. customers. CoinEx is obligated to implement geoblocking measures to prevent access to its platform from New York IP addresses.
NYAG Letitia James commented on this recent development, stating, “Today’s agreement should serve as a stern warning to cryptocurrency companies that disregarding New York’s laws carries significant consequences. My office will continue to take strong action against crypto firms that brazenly ignore the law, deceive investors, and put New Yorkers at risk.”
Notably, the NYAG’s office recently mandated Coin Cafe to refund over $4 million to its users after determining that the crypto firm deceived investors with its supposedly “free” bitcoin wallet storage service, which, in reality, was not free.
The development between CoinEx and the office of the NYAG settles a lawsuit brought by the latter against the firm in February 2023. The New York regulator alleged that CoinEx falsely represented itself as a cryptocurrency exchange and sold tokens labeled as securities and commodities without proper registration. Shortly after the lawsuit, CoinEx announced that it was withdrawing its services from the US market.
In May, Attorney General James proposed legislation called the Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act that would see more stringent regulatory policies for the cryptocurrency industry. James believes the lack of robust crypto rules makes the industry prone to fraud and other criminal activities.