Local regulator banned Hong Kong-based CoinEx from operating in New York and seized over $1.7 million worth of the crypto exchange’s funds

New York Attorney General Letitia James banned?crypto exchange CoinEx from operating in the state as the entity allegedly failed to register as a securities and commodities brokerage. In addition, the regulators seized about $1.7 million worth of the exchange’s funds.

AG James stated that the Hong-Kong based company falsely represented itself as a crypto exchange since it had no proper authorization to provide the crypto trading services. Now CoinEx is mandated to refund thousands of New York investors more than $1.1 million and pay more than $600,000 in penalties to the state.

Furthermore, the exchange was banned from offering, selling, or purchasing securities and commodities in New York or making its platform available in the state. In response, CoinEx publicly announced that it would withdraw its platform and services from the US. Besides, the exchange must implement geo-blocking to prevent access by New York IP addresses.

The Office of the Attorney General (OAG) conducted an investigation discovering that users with New York-based IP addresses on their devices could easily?create an account with CoinEx, as well as buy and sell digital tokens on the platform, although CoinEx was not registered with the state the way?New York law requires from all securities and commodities brokers.

OAG filed a lawsuit against the firm back in February and now the agreement on the case was reached.

Investors can receive their refund in the form of cryptocurrency directly from CoinEx over the next 90 days. After that term is over,?eligible exchange customers will be able to receive their refund in fiat from OAG. The amount of the refund will equal the sum held in customer accounts as of April 25, 2023.

We have previously reported that?New York Regulators Crackdown on Binance.