Cryptocurrency exchanges have been on the agenda of regulators recently. Most recently, a lawsuit has been filed against cryptocurrency exchange CoinEx. There were also claims of securities for four separate altcoins. Here are the details…
Lawsuit against Bitcoin and altcoin exchange CoinEx
The New York State Attorney General’s Office filed a lawsuit Wednesday against cryptocurrency exchange Coinex, arguing that the exchange is an unregistered securities broker and broker under state law. Coinex said it did not register as an exchange with the U.S. Securities and Exchange Commission (SEC), the U.S. Commodity Futures Trading Commission (CFTC), or with New York regulators prior to offering services in the state.
Allegedly, despite this, the company said it has an exchange on its website and offers services similar to those that national stock exchanges or other similar platforms can offer. The petition alleges that Coinex lists various tokens and services that qualify as securities and/or commodities under state law, drawing attention to New York’s Martin Law and general business law. The following statements were included in the documents:
The tokens each fall under Martin Law’s definition of any foreign currency and other commodity containing good, articles or materials. Coinex is primarily involved in the business of selling and offering commodities through accounts, deals or contracts to accounts in New York for investment purposes. Profits must first be derived from the efforts of others.
Some coins were called “securities”
According to the documents, NYAG’s office wants CoinEx to block local IP addresses, the exchange to stop doing any business in New York, and provide monetary compensation in New York. The filing also claims that Flexa’s AMP, LBRY’s LBC, Terraform Labs’ LUNA, and Rally’s RLY tokens are securities and commodities under state law. New York veteran detective Brian Metz said in a statement that he was able to buy and sell these tokens using Ethereum (ETH) through Coinex’s website in October.
As we have also reported as Kriptokoin.com, LBRY’s LBC token in particular has waged a legal battle. In recent weeks, the United States Securities and Exchange Commission (SEC) acknowledged that the sale of LBRY Credits (LBC) tokens on the secondary market does not constitute a security. This decision came during the appeal hearing in the LBRY and SEC case on January 30. The decision that LBC is a security categorized each sale of the LBC token over a six-year period as an investment contract, detailing the specifics of transactions. With this decision, the SEC also hoped to gain legitimacy in the secondary market.
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