​CoinEx will cease operations in the US and pay $1,7 million for illegal activities

What’s new? On June 15, New York Attorney General Letitia James recovered more than $1,7 million from Hong Kong-based CoinEx for failing to register as a securities and commodities broker-dealer as well as falsely representing itself as a crypto exchange. In addition, the company is ordered to cease operations in the state. In response to the Attorney General’s lawsuit, CoinEx publicly announced that it would cease providing services in the United States altogether.

Press release on the prosecutor’s website

CoinEx is a Hong Kong-based platform founded in 2017, also known as Vino Global. There are 718 coins and 1011 trading pairs available on the platform, with a daily trading volume of $37,5 million as of June 16. The native token CET is trading at $0,03207937, having gained 2,3% per day.

What else is known? According to the lawsuit, CoinEx is required to refund 4691 New York investors more than $1,17 million in funds and pay a fine of more than $600 000. Investors can receive their refund in the form of cryptocurrency directly from CoinEx within the next 90 days. Each investor will be refunded the amount in cryptocurrency or the cash equivalent of the cryptocurrency that they held in their accounts as of April 25, 2023.

In addition, CoinEx must implement geo-blocking to prevent New York IP addresses from accessing its platform. CoinEx is also prohibited from creating new accounts for US customers, and existing US customers can only withdraw their cryptocurrencies from the platform.

The Prosecutor’s Office stressed that unregistered crypto platforms carry risks for investors, consumers, and the economy as a whole.

“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,” James added.

How did events develop? On February 22, Letitia James accused CoinEx of illegally doing business in the state. She said the exchange violated the Martin Act, used to combat financial fraud. James demanded damages as well as a ban on access to CoinEx’s mobile app, website, and services in New York.

The exchange later announced that it would stop providing services to US citizens and residents. The company asked US users to withdraw their assets within 60 business days (until April 24) and said that after that it would “gradually ban the relevant accounts.”