In a latest development, popular cryptocurrency exchange, KuCoin has shut down its operation in New York. The Attorney General of the city, Letitia James confirmed the development on Tuesday. As revealed, the exchange agreed to block users from New York and also pay $22 million to settle its lawsuit.
Don’t forget that in March, the office of the Attorney General sued KuCoin for its failure to register with the state before allowing users to carry out transactions on its platform. According to James, crypto companies are bound by the same regulations as other financial institutions.
Notably, the exchange’s $22 million settlement includes the payment of $5.3 million to the New York government and the reimbursement of $16.7 million worth of cryptocurrencies to 177,800 New York investors. Worth noting that KuCoin’s settlement comes amidst U.S regulators effort to eliminate fraudulent and money laundering activities. In addition, the law enforcement agencies are also cracking down on crypto firms with inadequate measures to protect investors.
The Genesis of the lawsuit between KuCoin and New York authorities
Worth noting that the lawsuit between the exchange and the office of Attorney General began in March after Letitia James sued KuCoin for its failure to register before allowing traders to access crypto trading services on its platform. According to James, the exchange violated one of the state security laws, known as Martin Act. According to the exec, KuCoin wrongfully paraded itself as an exchange and sold its product “KuCoin Earn” to generate income for itself and investors.
In the filing against KuCoin in a state court in Manhattan, James sought a permanent injunction to stop the exchange from operating in New York till it complies with state laws. Apart from KuCoin, the authority has also been going after other firms that have allegedly violated existing U.S. financial laws.
In February, the office of the Attorney General also sued crypto trading platform, CoinEX for failing to register its offering as a security and falsely parading itself as an exchange. James claimed CoinEX did not register with the U.S. Securities and Exchange Commission (SEC) as mandated by existing laws.
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