NYAG Sues Cryptocurrency Company for Unlawfully Operating as a Virtual Currency Broker

The New York Attorney General ("NYAG") filed a Complaint against a cryptocurrency company for unlawfully operating as a virtual currency broker and misleading investors regarding its registration status.

The NYAG alleged that the company facilitated the purchase, sale, deposit, trading and borrowing of cryptocurrencies, including a pooled investment product referred to as the "Earn Interest Product," on its virtual marketplace without registering with New York State as a securities or commodities broker-dealer.

The NYAG also alleged the company allowed New York-based customers to open accounts and access its services while falsely advertising its compliance with applicable state regulations and licensing requirements. The NYAG asserted that the company continued to operate without registering with the State despite multiple warnings from the NYAG. The NYAG said that the misrepresentations were material to investors, and gave customers a misleading impression that they were transacting with a fully licensed company.

The NYAG is seeking monetary and injunctive relief, as well as a financial penalty.

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