New York State Attorney General Letitia James filed suit against KuCoin on Thursday, alleging that the cryptocurrency exchange has been operating in the state without registering as a securities and commodities broker-dealer.
Further, it is the first regulatory lawsuit that claims Ether to be a security. The labeling of Ether as a security was based on the Martin Act, a 102-year-old anti-fraud law, as the cryptocurrency’s market value depends on the actions of others, including its co-founder, Vitalik Buterin.
Apart from Ether, the lawsuit also classified LUNA and TerraUSD stablecoin as securities.
“The petition argues that 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. Because of that, KuCoin was required to register before selling ETH, LUNA, or UST,” the official press release stated.
Though the classification of many cryptocurrencies
