New York Attorney General Letitia James has filed a lawsuit against KuCoin, a virtual currency trading platform, for allegedly operating as an unregistered securities and commodities broker-dealer and falsely representing itself as an exchange. The lawsuit seeks to prevent KuCoin from operating in New York and block access to its website until it complies with the law.
Attorney General James has been actively cracking down on unregistered cryptocurrency platforms, and this lawsuit marks her eighth action to regulate the industry. The Office of the Attorney General was able to buy and sell cryptocurrencies on KuCoin in New York, even though the platform is not registered in the state.
KuCoin allows investors to trade popular virtual currencies such as ETH, LUNA, and TerraUSD (UST), which are considered securities and commodities. The lawsuit argues that KuCoin should have registered before selling these assets. Furthermore, KuCoin also sells unregistered securities through its lending and staking product, KuCoin Earn.
In addition to the registration violations, KuCoin claimed to be an exchange without being registered with the Securities and Exchange Commission or appropriately designated by the Commodity Futures Trading Commission, as required by New York Law. Furthermore, KuCoin failed to comply with a subpoena issued by the Office of the Attorney General.
Attorney General James seeks a court order to prevent KuCoin from misrepresenting itself as an exchange, prohibit its operations in New York, and implement geo-blocking based on IP addresses and GPS location to prevent access from the state.
This lawsuit is part of Attorney General James’ ongoing efforts to enforce New York laws in the cryptocurrency industry and protect investors. In recent months, she has taken action against other platforms such as CoinEx, Nexo, Celsius, and BlockFi Lending LLC for various violations.
Attorney General James urges New Yorkers affected by deceptive conduct in the virtual assets market to report any issues to the Office of the Attorney General. She also encourages workers in the cryptocurrency industry to file whistleblower complaints if they witness misconduct or fraud.
The case is being handled by Assistant Attorney General John Ruth of the Investor Protection Bureau, with assistance from Legal Assistants Charmaine Blake and Edward Jaffe, and Detective Investigator Brian Metz of the Investigations Division.
