Kucoin is now under legal action in the United States. The New York State Attorney General accuses Kucoin of allowing the sale and purchase of cryptocurrencies in New York State without the required registration. For the New York prosecutor, Ethereum is a security and the platforms that allow its purchase and sale must register as a securities and commodities broker. The outcome of the lawsuit will confirm whether title status is ultimately granted to the second-largest crypto. The New York prosecutor’s complaint was followed by a significant decline in the value of Ethereum.
New York prosecutor and Kucoin, a War Story
Legal troubles against cryptocurrency exchanges continue in the United States. After Kraken, and Binance, it is now Kucoin, so far sheltered, which is in the sights of American justice. Indeed, the New York prosecutor said she has launched a legal action against the exchange.
Letitia James accuses the platform of allowing the buying and selling of cryptocurrencies to residents of New York State without the required legal registration.
The prosecutor hopes to obtain from the tribunal the cessation of the activities of Kucoin in New York as well as blocking access to the platform site for residents of the State.
Kucoin is more than just a crypto exchange because of… Ethereum
In a statement, the New York Attorney’s Office released more details on the charges against Kucoin. For the New York prosecutor, Kucoin is not just a cryptocurrency exchange as it claims. Kucoin is a securities and commodities broker.
This status is particularly linked to the fact that Kucoin allows the purchase and sale of “securities” such as Ethereum, Terra or Luna. This is the first time that a regulator has considered Ethereum as a security.
Even if Kucoin demonstrated to be only a cryptocurrency exchange and no titles, it would surely be the beginning of the trouble. Indeed, the complaint of the prosecutor’s office makes it known that Kucoin is not even registered with the Securities and Exchange Commission (SEC).
The New York City prosecutor is making no secret of her intentions: the prosecution of Kucoin is the eighth action her office has taken against what she calls “obscure cryptocurrency platforms that don’t follow our laws and put New Yorkers at risk.”
The crypto community is going to have to follow this case with great interest. If Ethereum is recognized as a security, this should require all exchanges to register as a securities broker. This could also change the status of many cryptocurrencies. Indeed, apart from Bitcoin which does not belong to anyone, the other cryptocurrencies could finally be recognized as securities. Good or bad news for the ecosystem? Hard to say for now.
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