On June 15, the New York attorney general
announced a
settlement with a Hong Kong-based cryptocurrency platform to resolve allegations that the company failed to register as a securities and commodities broker-dealer and falsely represented itself as a crypto exchange. The respondent’s platform enables investors to buy and sell cryptocurrency. An investigator was able to create an account on the platform using a New York-based IP address to buy and sell tokens even though the respondent was not registered with the state. (Under New York law, securities and commodities brokers are required to be registered.) The respondent is ordered to refund more than one million dollars to investors and pay more than $600,000 to the state. According to the settlement, investors will receive their refunds in the form of cryptocurrency within 90 days. Additionally, the respondent must cease operating in the U.S., and implement geoblocking to prevent New York IP addresses from accessing its platform. The platform is also banned from offering, selling, or purchasing securities and commodities in New York, and must send weekly emails to its investors in New York, advising them to withdraw their funds from their accounts, or their funds will be transferred to the AG’s office. “Unregistered crypto platforms pose a risk to investors, consumers, and the broader economy,” the AG said, further warning of the serious consequences to other crypto platforms that do not follow New York law. This settlement follows other crypto-related legislation and suits from the New York AG (covered by InfoBytes
here).
