KuCoin Crypto Exchange Sued By NYAG Over Selling Securities

The New York Attorney General's office has filed a lawsuit against the KuCoin cryptocurrency exchange on Thursday, accusing the company of promoting unregistered securities and commodities. The lawsuit claims that KuCoin, headquartered in Seychelles, has been operating in New York without registering as a broker-dealer of securities and commodities.

NYAG Seeks To Block KuCoin

Although KuCoin is not registered in New York, the Office of the Attorney General (OAG) was able to engage in buying and selling cryptocurrencies on the platform while being present in the state. Through this legal action, Attorney General James seeks to prohibit KuCoin from operating in New York and to restrict access to its website until it complies with the law.

The lawsuit filed by the New York Attorney General against KuCoin also claims that the exchange's in-house lending and staking product, known as KuCoin Earn, constitutes an unregistered security offering. It is noteworthy that NYAG's previous submission classified Ethereum (ETH) as a security, but it has been modified to “commodities” according to recent reports.

Growing Crypto Crackdowns

Recent regulatory crackdowns in the United States have placed crypto exchanges at the forefront. U.S. authorities have targeted well-known companies such as Kraken, Coinbase, CoinEx, and even the largest crypto trading platform in the world, Binance. In a press release, the NYAG's office stated that they are taking action against cryptocurrency companies that are openly flouting the law and jeopardizing investors. The latest action is part of their efforts to control unscrupulous cryptocurrency firms and establish order in the industry.

KuCoin has a history of regulatory issues, with prior clashes with regulators. In 2022, Korean regulatory authorities accused the crypto exchange of engaging in “illegal business activities” without the necessary registration. Additionally, in December of the same year, the Dutch Central Bank made similar claims, alleging that the exchange was operating without a valid license.

Following the announcement of the lawsuit against KuCoin, Kucoin Token's value has decreased by 1.24% within the last hour, compared to a 3% decline over the previous 24 hours. As of writing, the KCS token is being traded near $8.

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