NYAG Sues Crypto Platform for Failing to Register as Broker-Dealer

The New York State Attorney General ("NYAG") sued a cryptocurrency platform for (i) failing to register as a securities and commodities broker-dealer and (ii) falsely representing itself as a cryptocurrency exchange.

According to the NYAG, the platform facilitated the purchase and sale of multiple crypto tokens without filing a registration statement to operate as a commodity or securities broker-dealer in the State of New York (a violation of New York’s Martin Act), and did not qualify for a registration exemption. The NYAG also said the platform falsely represented itself as a "Global Cryptocurrency Exchange" and included an "Exchange" tab on its website - which streamed real-time and historical data on the various virtual currencies available on its platform - without registering with either the SEC as a national securities exchange or the CFTC as a contract market.

Additionally, the NYAG said that the platform failed to comply with a subpoena related to the investigation requesting that representatives of the platform provide testimony regarding its digital asset trading activities.

The NYAG is seeking injunctive relief directing the platform to prevent access to its services and monetary relief including restitution, disgorgement and other relief as deemed appropriate.