Attorney General Letitia James has filed a lawsuit on Friday against KuCoin, a virtual currency trading platform, for failing to register as a securities and commodities broker-dealer and falsely representing itself as an exchange. Photo: Hans Penink/AP.
CITYWIDE — Attorney General, Letitia James, has filed a lawsuit against KuCoin, a virtual currency trading platform, for falsely representing itself as an exchange and for failing to register as a securities and commodities broker-dealer.
James’ office was able to buy and sell cryptocurrencies on KuCoin in New York despite the company not being registered in the state. The lawsuit aims to prevent KuCoin from operating in New York until it complies with the law.
“One by one my office is taking action against cryptocurrency companies that are brazenly disregarding our laws and putting investors at risk,” said Attorney General James. “Today’s action is the latest in our efforts to rein in shadowy cryptocurrency companies and bring order to the industry.
“All New Yorkers and all companies operating in New York have to follow our state’s laws and regulations,” James continued. “KuCoin operated in New York without registration and that is why we are taking strong action to hold them accountable and protect investors.”
KuCoin is a popular virtual currency trading platform that allows investors to buy and sell cryptocurrency through its website and app. It is known for offering a wide range of cryptocurrencies, including ETH, LUNA, and TerraUSD (UST), which are securities and commodities. This lawsuit is one of the first times a regulator is claiming in court that ETH, one of the largest cryptocurrencies available, is a security.
According to the petition, ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers to provide profit to the holders of ETH. Therefore, KuCoin was required to register before selling ETH, LUNA, or UST. However, KuCoin…
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