AG James Sues Cryptocurrency Platform KuCoin, Alleging Securities Violations

  • New York AG Letitia James filed a lawsuit against Mek Global Limited and Phoenixfin PTE Ltd., both doing business as KuCoin, alleging that the cryptocurrency platform violated the Martin Act when it failed to register as a commodity or securities broker-dealer and falsely represented itself as an exchange.
  • The complaint alleges that KuCoin violated the Martin Act in at least three ways. First, the platform allegedly engaged in the sale, offering, purchase, and offering to purchase cryptocurrencies that qualify as commodities and securities, without proper registration as a commodity or securities broker-dealer. Second, the platform issued and sold a product called “KuCoin Earn,” which the AG alleges is a security, without registering as a securities broker or dealer. Lastly, KuCoin is accused of presenting itself as an “exchange” without the required registration or designation mandated by New York law.
  • The state seeks to permanently enjoin KuCoin from selling and buying securities and commodities to and from New Yorkers, as well as mandating the implementation of geo-blocking to restrict New York residents from accessing its website and mobile app. In addition, the state seeks restitution and disgorgement, and requests the court to compel KuCoin to provide an accounting to facilitate these payments.
  • We have previously covered AG James’ efforts to crack down on cryptocurrency platforms, including a lawsuit against Celsius for allegedly defrauding investors and a settlement with Nexo to resolve allegations it failed to register with the state for the sale of securities.