After being sued for operating illegally in February 2023, CoinEx, a Hong Kong-based cryptocurrency exchange, has reached an agreement with the office of the New York Attorney General, which includes a payment of over $1.7 million and a ban from offering its services in New York.
The recovered funds will go into penalties and refunds to New York investors.
CoinEx to Refund Over $1 Million
In a press release from the New York Attorney General’s (NYAG) office CoinEx agreed to pay back more than $1.1 million to over 4,600 New York investors and further pay penalties worth $600,000 to the state of New York. The refund will happen over the next 90 days when users can be paid back in crypto directly from the exchange.
The agreement between CoinEx and the NYAG’s office will also prohibit the crypto firm from offering, selling, or buying securities and commodities in New York and ban the company from opening new accounts for customers in the U.S. The firm is also mandated to apply geoblocking to restrict access to the CoinEx platform for New York IP addresses.
Commenting on the latest development, NYAG Letitia James said:
“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.”
The office of the NYAG recently ordered Coin Cafe to refund over $4 million to users on the grounds that the crypto firm defrauded investors with its “free” bitcoin wallet storage service, which was not free.
NYAG Wants Tougher Crypto Regulations
The development between CoinEx and the office of the NYAG settles a lawsuit brought by the latter against the firm in February 2023. As previously reported by CryptoPotato, the New York regulator alleged that CoinEx falsely represented itself as a cryptocurrency exchange and sold tokens labeled as securities and commodities without proper registration.
Shortly after the lawsuit, CoinEx announced that it was withdrawing its services from the US market.
In May, Attorney General James proposed legislation called the Crypto Regulation, Protection, Transparency, and Oversight (CRPTO) Act that would see more stringent regulatory policies for the cryptocurrency industry. James believes the lack of robust crypto rules makes the industry prone to fraud and other criminal activities.
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