New York State Attorney General Letitia James cracked down on cryptocurrency platforms again and filed a lawsuit against KuCoin, accusing the Seychelles-based cryptocurrency exchange of violating securities laws by offering securities that meet the definition of securities without registering with New York authorities. Cryptocurrencies, including Ethereum.
According to the lawsuit filed Thursday in New York state court, KuCoin was not registered as a securities and commodities broker-dealer in New York, but instead falsely represented itself as an exchange that allows New York residents to register accounts in the state and buy and sell cryptocurrencies. platform. Additionally, the New York State Attorney General’s Office also accused KuCoin of selling unregistered securities through its lending and staking product, KuCoin Earn.
Letitia James stated that through this enforcement action, he hopes to seek a court order to prevent KuCoin from operating in New York State and direct KuCoin to implement geo-blocking of IP addresses and GPS locations to prevent New York State residents from accessing KuCoin’s applications and services.
New York State Attorney General: Ether is a Security
In this lawsuit, the New York State Attorney General’s Office also declared in court for the first time that “Ether is a security.” While U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler suggested that “Ether can be considered a security,” at the same time, the Commodity Futures Trading Commission (CFTC) has long asserted that “Bitcoin, Ether are commodity assets.”
“Like LUNA, UST, Ether is a speculative asset that relies on the efforts of third-party developers in order to provide profits to Ether holders,” Letitia James said in a statement on March 9.
The complaint also mentioned that after Ethereum switched to a proof-of-stake (PoS) consensus mechanism last year, it allowed users to earn rewards by staking Ether in order to make a profit, which also made Ether a security.
Ether fell 8% in just half an hour after the lawsuit came to light, while the broader cryptocurrency market saw similar losses.
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