• New York State Attorney General Letitia James has filed a lawsuit against KuCoin, alleging that the exchange is violating securities laws by offering tokens – including ether – without registering with the attorney general’s office.
• This is the first time a regulator has claimed in court that ether is a security.
• The SEC and CFTC have differing views on whether bitcoin and ether are commodities or securities.
New York Attorney General Alleges Ether Is a Security
The New York State Attorney General Letitia James has filed suit against crypto exchange KuCoin for allegedly violating securities laws by offering tokens – including Ether – without registering with the attorney general’s office. This marks the first time a regulator has claimed in court that Ether is a security.
Differing Views On Bitcoin & Ether As Commodities Or Securities
The U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler has hinted that his agency might consider Ether to be a security, while its sister regulatory agency – the Commodity Futures Trading Commission (CFTC) – has long maintained that both Bitcoin and Ether are commodity assets.
What Is The Martin Act?
The New York Attorney General’s suit argues that Ethereum should be considered a security under the Martin Act – an 102 year-old anti-fraud law which gives the Attorney General powers to investigate securities fraud and bring both civil and criminal actions against offenders.
Purpose of Lawsuit
According to its press release, this lawsuit is part of ongoing efforts to crack down on unregistered cryptocurrency platforms which are operating outside of legal regulations in order to protect investors from financial harm.
The outcome of this case could have far reaching implications for cryptocurrency regulation in the United States as it will set an important precedent for how regulators view cryptocurrencies such as Bitcoin and Ethereum in regards to their designation as commodities or securities moving forward.