(Adds details from court filings, KuCoin trading volume and
background, other enforcement actions, byline)
By Jonathan Stempel
NEW YORK, March 9 (Reuters) - New York's attorney
general on Thursday sued KuCoin for failing to register with the
state before letting investors buy and sell cryptocurrencies on
its platform, as part of her effort to rein in what she calls
"shadowy" cryptocurrency companies.
Attorney General Letitia James said the fourth-largest
cryptocurrency platform violated the Martin Act, a powerful
state securities law, by transacting in cryptocurrencies,
selling the product "KuCoin Earn" to generate income for itself
and investors, and wrongfully calling itself an "exchange."
In papers filed with a state court in Manhattan, James is
seeking a permanent injunction to stop KuCoin from operating in
New York until it complies with the law.
KuCoin did not immediately respond to requests for comment.
Launched in September 2017, KuCoin describes itself on its
website as the "People's Exchange," with more than 27 million
users across 207 countries and regions.
KuCoin trails Binance, Coinbase and Kraken in trading volume
among cryptocurrency spot exchanges, according to the data
company CoinMarketCap. It raised $150 million in a funding round
last May, giving it a $10 billion valuation.
James said KuCoin has let investors trade popular virtual
currencies such as ETH, LUNA and TerraUSD, and that her case is
among the first by a regulator calling ETH a security.
"One by one my office is taking action against
cryptocurrency companies that are brazenly disregarding our laws
and putting investors at risk," James said in a statement.
Last month, James sued the CoinEx cryptocurrency platform
for failing to register with the state.
In January, 10 states including New York secured up to $24
million from the cryptocurrency company Nexo Inc, which they
also accused of operating illegally.
KuCoin is headquartered in the Seychelles. James said its
owners are Mek Global Ltd, also based in the Seychelles, and
PhoenixFin PTE Ltd, based in Singapore.
(Reporting by Jonathan Stempel in New York; Editing by Diane
Craft and Daniel Wallis)
Messaging: jon.stempel.thomsonreuters.com@reuters.net))
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