cryptonewsz.com
In the crypto sphere, exchanges continue to come under scrutiny by regulators and relevant authorities. The reason is pretty simple: most exchanges offer tokens and services that qualify as securities and/or commodities, but they are being offered without any registration.
The New York Attorney General, Letitia James, has recently filed a petition saying that CoinEx is operating in the area as an unregistered broker for securities and commodities, even though its services and tokens fit the category under the Martin Act and the General Business Law.
Moreover, it has been said that CoinEx has not even registered with the Commodities Futures Trading Commission.
Services and tokens fall under the Martin Act because they represent financial investments in a business that generates profits through the efforts of others. CoinEx is primarily in the business of selling or proposing to sell commodities via various means, including contracts, accounts, and agreements.
The New York Attorney General’s office is waiting for the exchange platform to remove its commercial operations and set up a virtual fence around its services in the area by restricting IP addresses. CoinEx has also refused to comply with the subpoena, a more serious offense if it continues to do so.
CoinEx is not the only one sailing on this boat. It has others, too—LUNA by Terraform and AMP by Flexa are some examples.
The rise of cryptocurrency and its exchange platforms is noteworthy for the community. Regulators, however, do not share the same ideology, especially with the recent global events related to a particular crypto exchange platform that was one of the top crypto exchanges just a few months ago. The goal is now more firmly based on safeguarding the interests of retail investors.
Funds with platforms have to be secured for scenarios where they may begin to face problems with liquidity.
At the time this article was being written, the media was awaiting a statement from CoinEx. For the time being, CoinEx faces a difficult path ahead if it wants to continue pursuing expansion in New York. On the list are Rally’s RLY and LBRY’s LBC. Other platforms and their products will probably be scrutinized in the future.
The next step is for CoinEx to deliver complete financial restitution and disgorgement from its offerings that were made available to New York.
Letitia James has been authorized to table the proceeding.
CoinEx was started in 2017 and is based in Hong Kong. It has more than 200 cryptocurrencies on its platform. Since its inception, its operations have spread across the globe, with the minimum deposit required depending on the country in which it operates.
CoinEx is known as one of the most important cryptocurrency exchanges. If it wants to keep doing business in New York, it must now answer a few questions and explain why its tokens and services are essential.