Letitia James, the attorney general of New York, declared that her office had initiated legal action against the Seychelles-based cryptocurrency exchange Kucoin as part of its ongoing crackdown on cryptocurrency platforms.
Members of the Office of the Attorney General (OAG) could open a KuCoin account using a computer with a New York IP address and buy and sell digital tokens for a fee. This was despite the fact that the exchange was not registered in the state, according to the statement.
The office further claims that KuCoin trades a number of coins that are regarded as commodities or securities, including Terra (LUNA), TerraUSD (UST), and Ethereum (ETH). It also claims that its lending product, KuCoin Earn, offers unregistered securities.
The NYAG Calls Ethereum (ETH) Security
In addition to the case against the KuCoin exchange, James and the OAG maintain that Ethereum (ETH), the second-largest crypto asset by market capitalization, is security.
“ETH’s development and management are largely driven by a small number of developers who hold positions in ETH and stand to profit from the growth of the network and the related appreciation of ETH,” the 37-page court document asserted.
In addition, the report said that the exchange did not comply with New York law by registering with the Securities and Exchange Commission as a national securities exchange or receiving the proper designation from the Commodities Futures Trading Commission.
James wants to ban KuCoin from functioning in New York through this enforcement action, which is the latest move by the Attorney General, and to limit access to its website until it complies with the necessary legislation.
The case is comparable to one filed in February against CoinEx, which claimed that the exchange provided trading services for tokens including AMP, LUNA, and LBC, all of which the Attorney General’s office claims are securities.
While the news that James and the OAG are suing Kucoin is interesting, the cryptocurrency community has been concentrating on the fact that Ethereum (ETH) is being classified as a security by the New York Attorney General.
However, the news played a part in the cryptocurrency market’s decline to about $917 billion at press time. The crypto economy is now below the $1 trillion mark, down 7.36% as a result.