New York Attorney General Letitia James Sues CoinEx

CoinEx, a cryptocurrency exchange, has been served with a lawsuit by New York’s Attorney General Letitia James, who contends that the company falsely represented itself as an exchange by failing to register as a securities and commodities broker-dealer in the state. James’s allegations can be found in the lawsuit.

James submitted a petition to the New York Supreme Court on February 22 that consisted of 38 pages, alleging that CoinEx “engaged in repeated and persistent fraudulent practices” and violated the state’s Martin Act, which is widely regarded as one of the strictest anti-fraud and securities regulation laws in the United States. The petition was filed in response to a previous complaint that CoinEx had violated the Martin Act.

In addition to this, she said that CoinEx was a marketplace that offered a variety of tokens, including Amp (AMP), LBRY Credits (LBC), Rally (RLY), and Terra, that qualified as “both commodities and security” (LUNA).

James noted in a statement that CoinEx is not registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission, “as is necessary under New York law,” in order to sell the tokens. James made this statement on February 22.

The Attorney General’s Office is said to have opened a CoinEx account using a computer and internet address situated in the state of New York and to have been able to engage in trading on the platform.

She went on to say that the days of cryptocurrency firms such as CoinEx behaving as if the regulations did not apply to them are gone.

In addition, the petition alleges that CoinEx did not comply with a subpoena that was sent by the Attorney General’s Office on December 22. The subpoena required CoinEx to “give testimony about the virtual asset trading operations of its platform.”

“CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear. CoinEx’s non-appearance is prima facie proof that CoinEx has engaged in the [mentioned] fraudulent practices.” [Citation needed] “CoinEx was compelled by subpoena to appear for an examination under oath on January 9, 2023, and failed to appear.”

James is seeking a court order to stop CoinEx from marketing itself as an exchange and preventing it from operating in the state by ordering it to geoblock internet addresses and GPS location data originating from New York. The petition can be found here. James is also seeking a court order to prevent CoinEx from operating in the state.


Tagged : / / / / / / /

New York State Denies Air Permit to Greenidge Crypto Mining Facility on Seneca Lake

Greenidge Generation LLC has been denied a renewal of its air permit to continue operating its Bitcoin mining on the shores of Seneca Lake in New York. The New York State Department of Environmental Conservation (NYSDEC) made the decision on Thursday that Greenidge’s Bitcoin mining operation does not meet the requirements of state climate laws.

Greenidge Generation applied for the renewal of its air permit in March 2021.

In a statement, NYSDEC said that Greenidge’s application was inconsistent with the climate goals highlighted by the state’s Climate Leadership and Community Protection Act (CLCPA), which focuses on reducing New York’s greenhouse gas emission by at least 85% by 2050.

The regulator stated that a significant rise in greenhouse gas emissions from Greenidge’s Dresden-based power generation facility has been noticed since the previous permit was issued to the crypto mining company in 2016 and after the Climate Act (CLCPA) was enacted in 2019.

However, Greenidge stated that the decision by the regulator would not “have any impact on our current operations in Dresden.” The firm said it will continue operating its mining business under its current air permit while it challenges the NYSDEC ruling in court.

Greenidge said its “facility represents a remarkably insignificant 0.2% of New York’s target GHG [greenhouse gas] emissions level for 2030” and that the level of its emissions is down by 70% compared to the reference date of 1990 under the law.

Meanwhile, the Governor of New York state, Kathy Hochul, congratulated NYSDEC’s move to nullify Greenidge’s license. “I applaud NYSEC’s decision, which will stop future increases in greenhouse gas emissions at Seneca Lake,” the Governor tweeted.

On the other hand, workers and union members who are employed at Greenidge’s Dresden facility have expressed their disappointment by the NYSDEC’s decision as well as the proposed mining moratorium passed at the beginning of this month.

Early this month, emotions were high after the New York State Senate passed a bill that barred fossil fuel power plants from creating new projects to provide energy to proof-of-work (PoW) cryptocurrency mines for two years.

On 4th June, state assemblywoman Anna Kelles, who sponsored the bill, as well as environmentalists, called on New York Governor Kathy Hochul not just to sign the bill into law, but also to deny air permits for Greenidge Bitcoin mining firm.

The environmental groups thanked the elected New York lawmakers who passed the bill through the state’s two houses.

The bill effectively prohibited the establishment of new Bitcoin mines that utilize behind-the-meter fossil fuel power by denying air permits to the power plants that provide them with electricity. Greenidge Generation is one of two Bitcoin mining firms that use this model in New York state.

Hochul has still not signed the bill that would impose a two-year moratorium on the specified crypto mining operations.

Image source: Shutterstock


Tagged : / / / /

Crypto lender Nexo confirms NYAG order, calls it a ‘mix up’

Cryptocurrency lending firm Nexo Financial denies the allegations of offering unregistered services to New Yorkers put forth by Attorney General Letitia James.

Attorney General James directed two unnamed crypto lending companies to cease operations on Monday, citing failure to register the business in New York and performing unlawful activities.

Crypto lender Nexo is revealed to be one of the two companies to receive the cease and desist order from the Office of the Attorney General. Denying its involvement in unlawful operations, a Nexo spokesperson said:

“Nexo is not offering its Earn Product and Exchange in New York, so it makes little sense to be receiving a cease and desist order for something we are not offering in New York anyway.”

According to Nexo, the allegations of operating an unregistered business in New York “appears to be a case of mixing up the recipients of the letter.” The company also confirmed the use of IP-based geoblocking on its platform that prevents New Yorkers from participating in locally unregistered services:

“Still, we will engage with the NY AG and seek clarity. Our company retains top-tier legal counsel both from US-based law firms and our in-house legal team.”

In addition, the company has also highlighted that the Nexo Terms and Conditions explicitly state, “We do not offer our Earn product and Exchange in New York.”

To further protect New Yorkers from significant undisclosed risks, the New York State Office of the Attorney General has parallelly directed three more crypto platforms to provide information about their activities and products.

The order to shut down operations is backed by the Martin Act, which requires businesses to register before offering or selling securities or commodities in New York. “My office is responsible for ensuring industry players do not take advantage of unsuspecting investors,” said James.

Related: New York businesses ask governor to deny permits for crypto mining

A group of local New York businesses co-signed a letter asking New York State Governor Kathy Hochul to deny permits for repurposing the city’s defunct fossil-fuel power plants for crypto mining.

The proposal demands an assessment of the environmental impact of restarting the Greenidge Generating Station and the Fortistar North Tonawanda plants, which were shut down to control New York’s greenhouse gas emissions.