The New York Attorney General, Letitia James, has filed a lawsuit against popular crypto exchange KuCoin. The Attorney alleged that the exchange is illegally operating in New York.
James stated that KuCoin is not registered as a securities and commodities dealer-broker in New York but offers crypto services in the state. She noted that KuCoin had falsely represented itself as an exchange and filed that it shut down its operations in New York until it fully complies with the state’s laws.
“One by one, my office is taking action against cryptocurrency companies that are brazenly disregarding our laws and putting investors at risk. Today’s action is the latest in our efforts to rein in shadowy cryptocurrency companies and bring order to the industry,” Attorney James stated.
“All New Yorkers and all companies operating in New York have to follow our state’s laws and regulations. KuCoin operated in New York without registration, and that is why we are taking strong action to hold them accountable and protect investors,” she continued.
James Alleges Ethereum is a Security
The Attorney General also mentioned that KuCoin offers unregistered securities. James cited in the filing that KuCoin sells ETH, LUNA, and USDT, which all fall into the securities and commodities category.
The Office of the Attorney also argued that KuCoin Earn is a security that the exchange failed to register in New York. She claimed her office opened and funded an Earn portfolio with a New York IP when it was not authorized in the state. KuCoin Earn is a lending and staking service that offers interest to users for staking or locking in their crypto assets.
KuCoin has seen several lawsuits recently. The exchange failed to provide the required information when the Attorney’s office subpoenaed it to submit details on its digital assets trading in the state. Earlier, the Dutch Central Bank sued KuCoin for operating illegally operating in the Netherlands late last year. The South Korean regulatory body also sued KuCoin for a similar offense.
The Crackdown Continues
U.S. regulators have all targeted the crypto big guns in the country in their recent crypto crackdown. The filing against KuCoin means they have practically sued the top four exchanges in the crypto industry. KuCoin trails only Binance, Coinbase, and Kraken in trading volume.
Binance has been on the regulator’s books for some time. Kraken was forced to shut down its staking services, and Coinbase settled a regulator with $100 million for a money laundering lawsuit earlier.
