Officials in New York Block CoinEx Services and Seize $1.7M


CoinEx is no longer welcomed in New York.

In an unexpected turn of events, the New York state government, led by Attorney General Letitia James, has placed an official prohibition on the operations of CoinEx, a Hong Kong-based cryptocurrency exchange.

The state’s assertive crackdown has resulted in a seizure of over $1.7 million from the company’s funds. The confiscation follows claims that CoinEx disregarded legal obligations to register as a broker for securities and commodities.

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Such a resolution appears to draw a line under a February lawsuit. The suit charged the crypto exchange with a fraudulent representation of its services and failure to register according to local laws.

Upon the announcement of this closure, the regulators detailed the stringent measures that the crypto exchange now faces.

As part of today’s consent order, CoinEx is banned from offering, selling or purchasing securities and commodities in New York and is prohibited from making its platform available in the state.

Regarding the confiscated assets, the authorities have introduced a clear roadmap for their disbursement. Over $1.1 million will be refunded to a group of investors – precisely 4,691 of them residing in New York. The remaining amount exceeding $600,000 will be directed towards penalties payable to the state.

Other conditions imposed on CoinEx include the necessity of introducing geo-blocking measures to ensure the platform is inaccessible to users with New York IP addresses. The crypto exchange is also explicitly barred from establishing new accounts for customers in the United States.

Reiterating the seriousness of the situation, New York Attorney Letitia James added in the announcement:

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.

In terms of funds recovery, customers of CoinEx will have 90 days to retrieve their cryptocurrency directly from the platform. Once this window of opportunity closes, eligible investors could receive funds in fiat currency

This move marks a stern message to crypto businesses that the law will not be ignored. Companies found to mislead investors or put their funds at risk will face substantial consequences.

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