New York Seizes $1.7M in Crypto Assets from Banned CoinEx Exchange

CoinEx Prohibited from Conducting Business in New York

CoinEx, a cryptocurrency exchange based in Hong Kong, has been prohibited from conducting business in New York by Attorney General Letitia James. According to an announcement on June 15, more than $1.7 million of the exchange’s assets were confiscated for supposedly not registering as a securities and commodities broker.

CoinEx Agrees to Settlement with Attorney General Letitia James

The settlement of a prior legal action brought against CoinEx in February by New York state, which alleged that the exchange had misrepresented itself and neglected to register with local authorities, has been achieved.

As part of the agreement reached today, CoinEx is prohibited from offering, selling, or purchasing securities and commodities in New York and is barred from making its platform available in the state, according to the announcement.

In accordance with the agreement, more than $1.1 million will be refunded to 4,691 New York investors, and over $600,000 will be paid in fines to the state.

CoinEx must also utilize geo-blocking to stop access from New York IP addresses, and must not create any fresh accounts for U.S. customers.

“This agreement should be a warning to crypto firms that disregarding New York’s laws will not be tolerated. My office will continue to take action against those who break the law, deceive investors, and put New Yorkers in jeopardy,” James declared in the statement.

CoinEx customers will have the opportunity to reclaim their digital currency assets directly from the exchange in the upcoming 90 days. After this period, qualified investors will be able to obtain their funds in fiat currency by sending an email to coinexrefund@ag.ny.gov. The statement said that investors will be repaid cryptocurrency or equivalent cash stored in accounts as of April 25th, 2023.

On February 22, James brought a lawsuit against CoinEx in the New York Supreme Court, accusing them of “repeated and persistent fraudulent practices” and breaching the state’s Martin Act, which is one of the most stringent anti-fraud laws in the U.S. In the complaint, James described various tokens as both commodities and securities, including Amp AMP, LBRY Credits (LBC), Rally (RLY) and Terra (LUNA).

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