Recently, we have witnessed the wind down announcement of one of the most prominent crypto banks, Silvergate due to inappropriate regulatory frameworks. Now one more exchange, KuCoin, is facing a lawsuit by United States Attorney General Letitia James. She filed this lawsuit because of a violation of Securities and Commodities law in the state.
Letitia James is one of those Attorneys who raised their voice against unregistered crypto exchanges for a very long time. In August 2022, she alerted crypto investors and advised them to invest very carefully. Additionally, she requested whistleblowers to inform about unregistered crypto exchanges so they can take appropriate actions against them.
KuCoin is a digital currency trading platform that facilitates its users to buy and sell cryptocurrency through its website and application.
The New York Attorney General’s office has released a detailed report on the official website regarding this issue. In the report published in relation to the KuCoin lawsuit, they have informed that because the KuCoin has allowed investors to buy and sell crypto without registering with the state.
Various governments worldwide are tightening their grip on unregistered crypto exchanges because of risk and unpredictable nature. Last month similar action was taken by the United Kingdom Financial Conduct Authority in Leeds against unregistered crypto exchanges.
The Attorney General’s Office also said that despite the fact that the business is not officially registered in the state of New York, the Office of the Attorney General (OAG) was able to buy and sell cryptocurrency there.
This action clearly shows that the United States authorities are well aware of the risks related to unregistered crypto exchanges and taking proactive steps to stop any scam. Additionally, KuCoin trades securities in the form of KuCoin Earn. It is a lending and staking product of KuCoin.
The exchange is neither registered with the Securities and Exchange Commission as a national security exchange nor designated by the Commodity Futures Trading Commission. According to the Attorney General’s Office, it is mandatory to register if you want to conduct business in New York otherwise the particular firm will be declared illegal and will take strict action against them.
Attorney General Letitia James is seeking a court order that will restrict KuCoin from operating in New York without registration. She is also looking for a geo-blocking based on Ip addresses and GPS location to prevent its operations in New York.
