(Reuters) — CoinEx agreed to pay $1.8 million and be banned from operating in New York to settle state Attorney General Letitia James’ lawsuit accusing the cryptocurrency exchange of operating illegally because it failed to register with the state.
A proposed settlement was filed Wednesday in New York state court in Manhattan and requires a judge’s approval.
It calls for CoinEx to be prohibited from offering, selling or buying securities and commodities in New York, or making its platform available in the state.
The payment includes $1.17 million in refunds to 4,691 investors, which can be reduced if they withdraw crypto assets during a specified 90-day period, plus a $626,000 fine.
CoinEx did not admit wrongdoing by agreeing to settle. The Hong Kong-based platform was founded in 2017 and is also known as Vino Global Ltd.
“Unregistered crypto platforms pose a risk to investors, consumers and the broader economy,” Attorney General James said in a statement. “Today’s agreement should serve as a warning to crypto companies that there are serious consequences for ignoring New York laws.”
Neither CoinEx nor its attorney immediately responded Thursday to requests for comment.
Attorney General James sued CoinEx in February, saying its failure to register before buying and selling tokens like AMP, LBRY, LUNA and Rally violated the Martin Act, a powerful state law used to fight financial fraud.
The case was part of her enforcement efforts to rein in what she has called “shady” crypto companies.
Gary Gensler, who is the chairman of the US Securities and Exchange Commission, has also targeted the crypto industry.
This month, the SEC sued Binance, the largest crypto platform, and Coinbase, the largest US crypto platform, saying they operated as exchanges without registering with the agency.