Attorney General James goes on to state that various tokens utilized with Flexa, CoinEx’s cryptocurrency payment exchange method, are both securities and commodities.
The individuals holding themselves out as brokers and advisors doing business with and on behalf of CoinEx should have been forthcoming with the risks and issues associated with their products along with their lack of registered-broker status. If you invested with CoinEx, Contact Peiffer Wolf for a FREE Consultation by calling 585-310-5140 or by filling out a Contact Form on this website.
“The Tokens each fall within the Martin Act’s definition of commodities, which includes any foreign currency and any other good, article, or material,” the filing said. Further, “CoinEx is engaged in the business of selling and offering to sell commodities through accounts, agreements, or contracts to accounts in New York primarily for investment purposes. The Tokens are also securities under the Martin Act because they represent investments of money in common enterprises with profits to be derived primarily from the efforts of others.”
The tokens in question are used in exchanges on Flexa. If you invested in CoinEx and utilized any of these tokens, you may be eligible to recover damages:
Cryptocurrency firms, as of late, have been facing increased scrutiny over their capital accumulation practices. In January 2023, 10 states secured roughly $23 million in damages from the crypto firm Nexo Inc., which was accused of illegal operations and misleading investors. In June 2022, crypto firm BlockFi Lending LLC was ordered to pay $50 million in damages to all 50 US states, the District of Columbia, Puerto Rico, and the US Virgin Islands for its part in sales of unregistered securities.
These 2 cases make up a small portion of the nearly 105 cryptocurrency-related lawsuits filed with the SEC since 2018. The most common grounds for these lawsuits is that the majority of the tokens available on the market are unregistered securities.
Federal regulations for Securities have been put in place to protect investors, ensure a fair marketplace, and facilitate capital accumulation. If a company engaged in the business of selling cryptocurrency does not comply with necessary regulations, it can expose consumers to abuse such as fraud, negligent misrepresentation, ponzi schemes, and inflated risk and reward schemes, among others.
Similar and potentially worse outcomes are possible with cryptocurrency investments, partly because of the products’ propensity for extreme volatility.
Per SEC guidelines, investors may have the right to rescind, which would force the cryptocurrency exchange to return investments plus interest. Investors may also be entitled to additional damages.
Peiffer Wolf has helped thousands of investors just like you. Your losses may be recoverable if they were caused by unsuitable investment advice or negligence.
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