Crypto Platform Settles NYAG Charges for Failing to Register as Broker-Dealer

A cryptocurrency platform settled charges brought by the New York State Attorney General ("NYAG") for (i) failing to register as a securities or commodities broker-dealer and (ii) falsely representing itself as a cryptocurrency exchange.

As previously covered, the NYAG sued the cryptocurrency platform for facilitating the purchase and sale of multiple crypto tokens without filing a registration statement in the State of New York (a violation of New York’s Martin Act). The NYAG asserted that the platform did not qualify for a registration exemption. The NYAG alleged 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.

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

To settle the charges, the platform agreed to, among other things: (i) pay $1,799,105, including $1,172,971 in restitution and $626,134 in monetary relief, (ii) not engage in further regulatory violations and (iii) generally cease activities in New York.