In a recent lawsuit, the New York Attorney General’s office accused KuCoin of “ignoring our laws and placing investors in danger.”
New York Attorney General Letitia James has filed suit against KuCoin (KCS) as part of a larger effort to crack down on virtual currencies.
On Wednesday, the New York Attorney General’s office sued (1) the crypto exchange for breaking state securities and commodities laws. The NYAG has taken action to prevent New York residents from using KuCoin.
The wording of James’ plea was as follows:
“My office is targeting each cryptocurrency company that is flagrantly disobeying our laws and endangering investors. Today’s move is the latest in a series of moves to restore order to the bitcoin business and rein in shady companies.”
Everyone in the state of New York, as well as any businesses based here, must abide by our state’s regulations.
Furthermore, the Democratic lawyer and politician elaborated in the filing on:
“Because KuCoin ran its New York operations without the proper licenses, the state is “taking serious steps to investigate the company and protect investors.”
Notwithstanding his disapproval of KuCoin, Attorney General James has declared Terra (LUNA), TerraUSD (UST), and Ether (ETH) to be securities. Her view on traded digital currencies is consistent with the SEC’s past stance.
Petition wording”
“The success of Ethereum (ETH), like that of LUNA and UST, is contingent on the work of independent developers.
KuCoin was similarly compelled to become registered before the sale of LUNA, UST, or ETH.”
NY AG Claims KuCoin Made Misleading Statements
According to the NYAG lawsuit, KuCoin made misleading claims about being a cryptocurrency exchange. The petition claims that the cryptocurrency exchange acts more like a broker-dealer in stocks and commodities.
The NYAG plans to prevent KuCoin from doing business by demanding that it implement a geo-fencing system that takes into account users’ IP addresses and geographic locations.
Given regulators’ recent focus on staking services, the filing of the NYAG action at this time seems odd. As an example, the SEC penalized prominent exchange Kraken $30 million because of problems with its staking product, which reportedly broke federal securities laws.
Furthermore, SEC Chief Gary Gensler has hinted that the regulatory body might ban Ether in the past. Gensler claims that the SEC recognizes only Bitcoin as not being a security.
This latest push to regulate the cryptocurrency market, especially in New York, comes from Attorney General Letitia James. The state’s crypto regulations are among the nation’s toughest.
About KuCoin
KuCoin, which promoted itself as the “most advanced and safe cryptocurrency exchange,” lost $150 million in a cyberattack in the year 2020. Despite this, CoinGecko ranks the Seychelles-based exchange highly (5th) based on the exchange’s “trust score.” Regarding 24-hour trading volume, it is the 12th largest cryptocurrency exchange.
KuCoin is a cryptocurrency trading platform where users may buy, sell, and trade cryptocurrencies using a website and mobile app. The KuCoin Earn lending and the staking product is an unregistered security that is sold on the exchange alongside Ether, luna, and the US dollar.