By Jonathan Stempel
NEW YORK (Reuters) -New York’s lawyer basic on Thursday sued KuCoin for failing to register with the state earlier than letting buyers purchase and promote cryptocurrencies on its platform, as a part of her effort to rein in what she calls “shadowy” cryptocurrency firms.
Legal professional Basic Letitia James stated the fourth-largest cryptocurrency platform violated the Martin Act, a robust state securities legislation, by transacting in cryptocurrencies, promoting the product “KuCoin Earn” to generate revenue for itself and buyers, and wrongfully calling itself an “change.”
In papers filed with a state courtroom in Manhattan, James is looking for a everlasting injunction to cease KuCoin from working in New York till it complies with the legislation.
KuCoin didn’t instantly reply to requests for remark.
Launched in September 2017, KuCoin describes itself on its web site because the “Individuals’s Alternate,” with greater than 27 million customers throughout 207 international locations and areas.
KuCoin trails Binance, Coinbase and Kraken in buying and selling quantity amongst cryptocurrency spot exchanges, in keeping with the information firm CoinMarketCap. It raised $150 million in a funding spherical final Could, giving it a $10 billion valuation.
James stated KuCoin has let buyers commerce common digital currencies akin to ETH, LUNA and TerraUSD, and that her case is among the many first by a regulator calling ETH a safety.
“One after the other my workplace is taking motion towards cryptocurrency firms which are overtly disregarding our legal guidelines and placing buyers in danger,” James stated in a press release.
Final month, James sued the CoinEx cryptocurrency platform for failing to register with the state.
In January, 10 states together with New York secured as much as $24 million from the cryptocurrency firm Nexo Inc, which in addition they accused of working illegally.
KuCoin is headquartered within the Seychelles. James stated its house owners are Mek International Ltd, additionally based mostly within the Seychelles, and PhoenixFin PTE Ltd, based mostly in Singapore.
(Reporting by Jonathan Stempel in New York; Modifying by Diane Craft and Daniel Wallis)