In February 2023, Letitia James, the Attorney General of New York, filed a lawsuit against Coinex, a digital currency trading platform, on charges of offering unregistered securities and operating an unregistered exchange. According to the initial complaint, the Attorney General’s office discovered that unregistered securities could be obtained from Coinex in New York.

After more than three months, Coinex reached a settlement with the Attorney General, agreeing to pay $1.7 million in fines and restitution. As a result, the platform is now prohibited from operating in New York, and Coinex has expressed its intention to withdraw its activities from across the United States. James emphasized that the primary goal of her office is to protect investors in New York and hopes that this settlement will serve as a valuable lesson.

James stated, “Unregistered digital platforms pose a threat to investors, consumers, and the economy as a whole. Today’s agreement should serve as a warning to digital currency companies that there are serious consequences for ignoring New York laws. My office will continue to fight against digital currency companies that disregard the law, deceive investors, and put New Yorkers at risk.”

Similarly, in March, the Attorney General’s office filed a lawsuit against Kucoin using the same approach. Notably, law enforcement officials in the state classified Ethereum (ETH) as an unregistered security in that particular case. Additionally, in May, the Attorney General’s office successfully obtained $4.3 million from Coin Cafe, a Brooklyn-based digital currency company, due to its deceptive practices towards investors.

The crackdown led by James and her office coincided with enforcement efforts initiated by the U.S. Securities and Exchange Commission (SEC) during the same period.