NYAG sues KuCoin over New York operations
The crypto company will be forced to geo-block all users in the state.
New York Attorney General Letitia James has filed a lawsuit against the cryptocurrency exchange KuCoin, according to a March 9 announcement.
New York aims to block KuCoin
James announced charges in a press release today, stating:
“Today’s action is the latest in our efforts to rein in shadowy cryptocurrency companies … KuCoin operated in New York without registration and that is why we are taking strong action to hold them accountable and protect investors.”
The Office of the Attorney General (OAG) now aims to stop KuCoin from operating in New York. It also aims to have the company restrict access to its website until it can comply. The company has been instructed to implement a geo-blocking feature in order to do so.
The OAG said that it was able to trade various cryptocurrencies on the exchange even though the company is not registered to provide those services in New York.
The office additionally says that KuCoin claims to be an exchange but is not registered with the U.S. Securities and Exchange Commission (SEC), nor has it gained the relevant designation from the Commodities and Futures Trading Commission (CFTC).
The office further alleges that KuCoin trades several coins that are considered securities or commodities such as Ethereum (ETH), Terra (LUNA), and TerraUSD (UST). It also alleges that it offers unregistered securities through its lending product, KuCoin Earn.
OAG takes strict stance on crypto
The Attorney General’s office has taken action against several other cryptocurrency companies in the past. It made similar allegations against CoinEx in late February.
The office filed fraud charges against former Celsius CEO Alex Mashinsky in January 2023 and reached a $45 million settlement with Nexo that same month. The office additionally issued a general warning to crypto investors and sought information from individuals affected by the crypto market crash at various points in 2022.
The OAG often takes action against companies that have not obtained a BitLicense from the New York Department of Financial Services. Currently, just 33 firms have a license or charter, giving the office plenty of opportunities to impose its rule.