New York Attorney General Recovers $1.7 Million from CoinEx for Operating Illegally

New York Attorney General Letitia James has successfully recovered over $1.7 million from CoinEx (COINEX) following a lawsuit against the cryptocurrency platform. CoinEx was found to be operating without the necessary registration as a securities and commodities broker-dealer and falsely representing itself as a crypto exchange. The resolution of the lawsuit requires CoinEx to refund more than $1.1 million to New York investors and pay over $600,000 in penalties to the state.

As part of the consent order, CoinEx is now banned from offering securities and commodities transactions in New York and prohibited from providing its platform in the state. In response to the lawsuit, CoinEx has publicly announced its withdrawal from the United States. Attorney General James has been actively working to enhance oversight and regulation of cryptocurrency companies to safeguard New York investors, resulting in over $500 million recovered from the cryptocurrency industry.

Attorney General James stressed the risks associated with unregistered crypto platforms, highlighting the importance of compliance with New York’s laws. She reiterated her commitment to crack down on crypto companies that disregard the law, deceive investors, and put New Yorkers at risk.

CoinEx, a Hong Kong-based virtual currency trading platform, allowed investors to buy and sell cryptocurrency without registering as a securities and commodities broker-dealer, a requirement under New York law. An investigation conducted by the Office of the Attorney General (OAG) confirmed that individuals with New York-based IP addresses could easily access and utilize CoinEx’s services.

Under the terms of the settlement, CoinEx is obliged to provide full refunds totaling $1,172,971.50 to 4,691 investors in New York. The refunds can be received as cryptocurrency directly from CoinEx within the next 90 days. After this period, eligible investors can request their refund in U.S. currency by contacting OAG. The refund amount will be based on the cryptocurrency or its cash equivalent held in the investors’ accounts as of April 25, 2023.

CoinEx must also implement geoblocking measures to prevent New York IP addresses from accessing its platform. In addition, the company is prohibited from creating new accounts for U.S. customers, and existing U.S. customers are only allowed to withdraw their cryptocurrency holdings from the platform.

This settlement is part of Attorney General James’ ongoing efforts to enforce New York laws within the cryptocurrency industry. Recent actions include the introduction of comprehensive cryptocurrency legislation, the recovery of $4.3 million from Coin Cafe for defrauding investors, and lawsuits against KuCoin, Nexo, and the former CEO of Celsius. The Attorney General has consistently emphasized the importance of accurately declaring and paying taxes on virtual investments and urges affected individuals to report deceptive conduct in virtual asset markets.

Assistant Attorney General Shantelee Christie, along with Legal Assistants Charmaine Blake and Edward Jaffe, and Senior Detective Investigator Brian Metz, handled the matter within the Investor Protection Bureau. The Bureau operates under the Division of Economic Justice, overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy, with Bureau Chief Shamiso Maswoswe and Deputy Bureau Chief Kenneth Haim leading the Investor Protection Bureau.


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Tether Emphasizes Commitment to Transparency, Releases Reserves Information in Response to CoinDesk’s FOIL Request

Tether has reaffirmed its commitment to transparency and announced its completion of reporting obligations to the New York Attorney General’s Office. Under the terms of its 2021 settlement, Tether fulfilled its quarterly reporting requirements for a period of two years. There have been no indications of incomplete disclosures or inadequate reserves during this time, cementing Tether’s position as a reliable stablecoin. Furthermore, Tether proudly boasts its largest market cap in history, highlighting its strengthened position within the market.

Following the settlement last year, CoinDesk sought public disclosure of Tether’s quarterly reports through New York’s Freedom of Information Law. Today, the New York Attorney General’s Office provided responsive documents to CoinDesk as Tether decided to withdraw its opposition to the request. Tether initially contested the release of confidential customer data and sensitive commercial information, citing concerns over potential exploitation by malicious actors. However, Tether’s unwavering dedication to transparency led to the prioritization of openness over prolonged legal battles that could divert attention from critical community matters.

Among the disclosed documents are statements from Tether’s banks, confirming the existence of the company’s reserves. These statements align with the publicly disclosed, independent third-party assurance attestations, further substantiating Tether’s commitment to transparency. The provided materials also shed light on Tether’s implementation of best-in-class asset management strategies, including short-term investments and diversification, as evidenced by the various bank statements. Tether aims to dispel the unfounded fear, uncertainty, and doubt (FUD) surrounding the backing of its stablecoin through these documents. Additionally, it is important to note that the materials are outdated and do not accurately reflect the present state of Tether’s reserves, considering the transformative changes within its ecosystem. Tether has significantly reduced its commercial paper holdings to zero in mid-2022 and intends to bring its secured loans portfolio down to zero in the near future.

The timing of today’s attack on USD₮, affecting both decentralized finance (DeFi) and centralized exchanges, coincides with the handover of materials to CoinDesk, raising questions about potential motives. Nonetheless, Tether emphasizes its transparency and expresses utmost confidence in the accuracy of its financial figures. While the sensitivity surrounding the release of confidential data to government agencies has diminished since 2021, Tether remains vigilant regarding customer data. Despite potential biases in CoinDesk’s coverage, Tether calls upon them to refrain from publicly disclosing any past or present customer names to avoid exposing individuals within the community to physical or digital risks.

While CoinDesk is still likely reviewing the provided information, Tether closely monitors the USD₮ markets for signs of manipulation that could induce panic if and when CoinDesk decides to publish its findings. Despite the associated risks, Tether firmly stands in favor of transparency. The published information, if interpreted correctly, serves as public proof of Tether’s legitimate business operations and the existence of its reserves.

Tether proudly asserts its position as the leading stablecoin, making positive contributions to the community. The company takes pride in the deep liquidity of its reserves, as demonstrated through its strength and stability during numerous industry-wide challenges. Tether remains steadfast in its commitment to safeguarding customers, personnel, and the wider community against any malicious attacks.


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China’s Shanghai Prioritizes Blockchain, Web3.0, and Metaverse in Three-Year Manufacturing Development Plan

Shanghai, a front-runner in the deployment of emerging technologies in China, has recently announced its ambitious “Three-Year Action Plan for Promoting High-Quality Development of Manufacturing (2023-2025).” This strategic initiative was revealed by the Shanghai Municipal Government Office, highlighting the city’s commitment to accelerating the development of its digital economy with a focus on Blockchain, Web3.0, and the Metaverse.

The plan underscores the role of these three key technologies in shaping the future of the city’s manufacturing industry. Blockchain and Web3.0, both pillars of the next generation digital economy, are spotlighted as integral parts of the city’s digital transformation strategy. By prioritizing these technologies, Shanghai aims to position itself at the forefront of digital innovation and economic growth.

The development of the Metaverse, a term used to describe a virtual-reality space where users can interact with a computer-generated environment and other users, is another pivotal aspect of the plan. This follows the release of the “Shanghai Metaverse Key Technology R&D Plan (2023-2025)” by the Shanghai Municipal Science and Technology Commission on 13 June. The Metaverse initiative integrates local and international industrial development trends, focusing on key technology dimensions such as content, computation, transmission, and terminal technology.

Furthermore, the action plan also outlines the city’s effort to foster the creation of future industries, including the construction of advanced industrial areas like Zhangjiang, Lingang, and the Bay of Large Zero. These locations will serve as the leading areas for future industrial development, marking another step towards Shanghai’s goal of becoming a global tech hub.

With its comprehensive and forward-looking approach, the “Three-Year Action Plan for Promoting High-Quality Development of Manufacturing” is poised to solidify Shanghai’s position as a global leader in manufacturing and digital innovation. This move reaffirms the city’s commitment to embracing advanced technology and digital solutions as key drivers for future economic growth and sustainability.


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Tether CTO Paolo Ardoino Dispels USDT Market Fear Amidst Rising Deposits in Curve 3Pool

Paolo Ardoino, CTO of Tether and Bitfinex, has responded to growing fears in the crypto market with an assertive tweet stating, “Markets are edgy in these days, so it’s easy for attackers to capitalize on this general sentiment. But at Tether we’re ready as always. Let them come. We’re ready to redeem any amount.” The statement seems to address recent speculations and rumors (FUD – Fear, Uncertainty, and Doubt) circulating around increased deposits of Tether’s stablecoin USDT into the Curve 3Pool.

An analyst using the Twitter handle ‘Fortitude’ had raised concerns about the sudden increase in USDT deposits into the Curve 3Pool. “Why is USDT being deposited into the Curve 3Pool in such great quantities? Now the percentage is 50%, up from 30% just 48h ago. Do they know something we don’t?” questioned Fortitude.

The commentator went on to suggest that such sharp spikes in asset deposits often precede significant market events, citing examples of the USDT depeg in May 2022 in relation to Luna/Terra, the FTX incident in November 2022, and the USDC depegging in March 2023. The analyst expressed hope that the increased USDT deposits were a “nothingburger”, while maintaining an interest in the ensuing developments.

USDT has a longstanding history of being a focal point for FUD within the cryptocurrency space. Critics frequently express skepticism towards the stablecoin’s peg to the US dollar, and rumors of insolvency have circulated in the past. Tether has consistently refuted these claims, maintaining that every USDT token is fully backed by reserves.

In response to the concerns, Ardoino’s tweet portrays a confident stance, emphasizing Tether’s preparedness to handle any potential market turbulence. By asserting that Tether is ready to “redeem any amount,” Ardoino implies the company’s robust reserve position, seeking to quell anxieties surrounding its solvency and the stability of USDT.

This public response from Tether’s CTO is part of an ongoing effort by the company to address concerns and maintain transparency in its operations. The rapidly evolving cryptocurrency landscape continues to prompt companies like Tether to stay proactive in dispelling market fears and ensuring stability for their users.


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