New York AG Sues KuCoin, Alongside Claims That Ethereum Is a Security

New York (NY) Attorney General Letitia James has filed a lawsuit against KuCoin. She alleges that the exchange has been buying and selling cryptocurrencies without registering in the state.

• What: NY Attorney General Letitia James filed a petition arguing that Ethereum, just like LUNA and Terra USD (UST), is a security
• Why: James claims KuCoin has been buying and selling cryptocurrencies without registering in the state
• What next: More details regarding the same are yet to arrive

In a Thursday announcement, the office of NY Attorney General Letitia James said it had filed a lawsuit against the cryptocurrency exchange KuCoin. Based on the filing, James charges KuCoin for illegally buying and selling cryptocurrencies without registering in the state.

I'm suing cryptocurrency platform @kucoincom for illegally operating in New York without registering with the state.

This is our eighth action to rein in shadowy cryptocurrency platforms that disregard our laws and put New Yorkers at risk.

— NY AG James (@NewYorkStateAG) March 9, 2023

On Ethereum, Letitia James said that, like Terra Luna (LUNA) and Terra USD (UST), Ethereum was also a security. Notably, the office of the AG is the first regulator to make such an allegation with no definite framework available to support the claim. A paragraph in the petition reads, “ETH, just like LUNA and UST, is a speculative asset that relies on the efforts of third-party developers in order to provide profit to the holders of ETH.” With this lawsuit, the Attorney General intends to prevent the exchange from operating within the state of New York. They also want to block access to the KuCoin website, with these sanctions expected to stand until KuCoin complies with the law. Commenting about the lawsuit, James said:

One by one, my office is taking action against cryptocurrency companies that are brazenly disregarding our laws and putting investors at risk. All New Yorkers and all companies operating in New York have to follow our state’s laws and regulations.

JUST IN: 🇺🇸 New York says #Ethereum is a security in KuCoin lawsuit.

— Watcher.Guru (@WatcherGuru) March 9, 2023

KuCoin became the latest subject of the New York Attorney General’s pursuit to bring down crypto firms operating contrary to the law. James also articulated that the exchange must be held accountable as part of investor protection efforts. Furthermore, this is not the first time the office of the AG has mounted a crackdown in the crypto sector since the onset of 2023. In January, Letitia James filed a case against Alex Mashinsky with the intention to ban the Celsius founder and CEO from ever conducting or participating in a business. From the filing, Mashinsky was defrauding investors by concealing the company’s poor financial standing. More details regarding the latest case will be reported as they break.

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