KuCoin Settles $22M NYAG Lawsuit, Exits New York Market
KuCoin Settles Lawsuit Over ETH as Security
Cryptocurrency exchange KuCoin has reportedly settled a lawsuit in which Ethereum (ETH) was classified as security. This case marks a significant regulatory action as it is the first time Ethereum has been categorized in this way.
The Case: New York Attorney General vs KuCoin
According to Reuters, KuCoin has decided to settle the lawsuit filed by New York Attorney General (NYAG) Letitia James, rather than face it. The settlement will cost the platform a hefty $22 million and will also result in it leaving the state of New York.
The NYAG had sued the exchange in March of this year for operating in the state without registering as a securities and commodities broker. In addition, the exchange was accused of misrepresentation. The aim of the lawsuit was to stop the exchange’s operations in New York and block users’ access to the website until it complies with the laws.
KuCoin Lawsuit: ETH as Security
Interestingly, the lawsuit also claimed that popular cryptocurrencies like Ethereum (ETH), LUNA and TerraUSD (UST) were securities and commodities. This was the first major lawsuit to label Ethereum (ETH) as security, which had previously been classified as a commodity by most regulatory bodies.
In a statement to Reuters, Attorney General Letitia James said that “crypto companies should understand that they have to play by the same rules as other financial institutions”. However, an official statement on the settlement of the lawsuit is still pending.
Regulatory Issues for Crypto Companies
Although this case seems to be resolved now, the conflict of US regulatory authorities with crypto companies is far from over. Just a few weeks before this case, US regulatory authorities settled a lawsuit against the world’s largest crypto exchange – Binance and its founder – Changpeng Zhao.
In addition, the NYAG herself still has pending cases against the crypto exchange – Gemini, the insolvent crypto lender – Genesis Global, and its parent company – Digital Currency Group (DCG). The Attorney General’s office accuses all three parties of defrauding investors of more than $1 billion, which is disputed.
Source: Reuters
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