- Yesterday, New York state Attorney General Letitia James filed a lawsuit in Manhattan.
- The legal documents target popular crypto exchange KuCoin and PoS altcoin Ethereum (ETH).
- A week ago, SEC Chair Gary Gensler declared everything except Bitcoin (BTC) securities.
As the United States government continues curbing crypto, the New York Attorney General has hit the Seychelles-based major crypto exchange KuCoin with a lawsuit for allegedly failing to register with the state. On top of that, Attorney General Letitia James also claimed that Ethereum (ETH) is a security, while KuCoin is wrongfully calling itself an “exchange”.
NY AG: The Martin Act Is Severely Violated
In the lawsuit filed on Thursday in Manhattan, Letitia James claims that KuCoin proceeded to sell unregistered crypto currency assets, including Ethereum (ETH) and Terra Luna Classic (LUNC). This might be seen as a Martin Act violation, a powerful New York state securities law.
While TerraForm Labs was recently probed by Gary Gensler and the U.S. Securities and Exchange Commission for manipulation of its market price, Ethereum’s possible status as a security came after the switch to Proof of Stake (PoS). Moreover, the legal document explains that “Vitalik Buterin and the Ethereum Foundation played key roles in facilitating the recent fundamental shift of the transaction volume method from Proof of Work to Proof Of Stake.”
Ultimately, the move by the New York Attorney General might set a precedent in the crypto industry and is likely to be followed by lawsuits against other big names in crypto. Letitia James confirmed this approach in an interview for Reuters: “One by one my office is taking action against cryptocurrency companies that are brazenly disregarding our laws and putting investors at risk.”
KuCoin Hasn’t Received Any Legal Documents
The Seychelles-located crypto exchange might be getting dragged through the mud in New York, but the legal action taken against KuCoin hadn’t reached the company’s headquarters yet. DailyCoin reached out to KuCoin for a comment and received a reply from the crypto platform’s legal team.
In the response, the representatives of the fourth largest crypto exchange state: “At present, KuCoin has yet to receive any legal documents regarding this incident. KuCoin will continue to closely monitor the situation and will be addressing this matter through legal means if needed.”
On the Flipside
- KuCoin does not have a license in the United States, nor does it have a branch.
- The crypto platform’s parent companies are based in Seychelles and Singapore.
- The Commodity Futures Trading Commission regulates Ethereum as a commodity.
Why You Should Care
KuCoin is the fourth largest cryptocurrency exchange globally and among the fastest growing.
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