NY AG sues KuCoin for selling securities and commodities without registration

New York authorities Attorney General Letitia James announced that she has filed suit against cryptocurrency speech KuCoin aft she was capable to bargain and merchantability crypto connected the exchange, which is not registered successful New York. “This enactment is 1 of the archetypal times a regulator is claiming successful tribunal that ETH, 1 of the largest cryptocurrencies available, is simply a security,” according to her statement.  

The complaint, filed connected March 9 successful the Supreme Court of the State Of New York County of New York County, alleges that Seychelles-based KuCoin violated securities instrumentality erstwhile it “sold, offered to sell, purchased and offered to acquisition cryptocurrencies that are commodities and securities” to New Yorkers without being registered with the lawyer general’s office.

In addition, KuCoin is alleged to person issued and sold its KuCoin Earn product, which the ailment labels a security, without registering arsenic a securities broker oregon dealer. Also, it alleges KuCoin misrepresented itself arsenic an exchange, since it lacked registration for that relation arsenic well.

Related: Dutch cardinal slope says KuCoin is not licensed and 'illegally offering services'

The suit stated that “under some authorities and national authority, ETH, LUNA, and UST are commodities,” nether the state’s Martin Act, and KuCoin filed to registry arsenic a commodities broker. The suit went connected to accidental “ETH, LUNA, UST, and KuCoin Earn are each securities nether Waldstein,” referring to trial established by the New York Supreme Court of Albany County successful 1936, arsenic good arsenic nether the Howey test. Furthermore:

“The Howey trial is applicable to the tokens arsenic illustrated by caller national authority.”

The suit specifically cites the SEC v. LBRY lawsuit to enactment that claim. It sought a imperishable injunction against KuCoin “selling and buying securities and commodities to and from New Yorkers.” In addition, it asked the tribunal to request an accounting of each New Yorkers who person utilized the speech and disgorgement of funds illegally obtained from New Yorkers.

— NY AG James (@NewYorkStateAG) March 9, 2023

This is James’s “eighth enactment to rein successful shadowy cryptocurrency platforms,” according to her statement.