The New York Attorney General’s Office has filed a lawsuit against the cryptocurrency exchange CoinEx, alleging that the platform illegally operates as a broker-dealer.

According to a lawsuit filed by New York Attorney General Letitia James in the New York Supreme Court, the exchange violates the Martin Act, which is considered one of the most stringent anti-fraud and securities regulations in the US. James claims that CoinEx is not registered with the US Securities and Exchange Commission (SEC) and the US Commodity Futures Trading Commission (CFTC), which also violates New York law.

The Attorney General’s Office created an account on CoinEx using an IP address from New York and found out that nothing was preventing them from conducting cryptocurrency transactions. Various crypto assets are traded on CoinEx as commodities and securities, including AMP, the prosecutor noted.

“Many cryptocurrency platforms act as if the rules don’t apply to them. These venues are defying our laws, endangering New Yorkers. We intend to terminate CoinEx operations in New York and continue to protect people from the risks of the crypto industry,” James said.

The lawsuit also states that the management of CoinEx did not comply with the subpoena dated December 22, 2022, sent by the Prosecutor General’s Office. CoinEx was required to provide evidence regarding its virtual asset trading activities. According to James, CoinEx’s failure to appear in court is evidence that the exchange was involved in fraudulent activities. The prosecutor is seeking an injunction to ban advertising and the operation of the exchange in the state, as well as the introduction of geo-blocking of IP addresses of users from New York.

Recall that last year, the South Korean Financial Services Commission (FSC) became interested in CoinEX activities, suspecting the trading platform of non-compliance with the requirements of local regulators.