The New York attorney general issued a formal lawsuit against KuCoin, which performs securities functions, including crypto assets. Within this legal procedure, Ethereum was classified as a security, together with other tokens. ETH is exchanged by the firm without a respective registration with the authorities.
Legal issue with KuCoin
The cryptocurrency exchange platform is sued for inconsistencies in the regulatory section of the type of assets it manages. On this occasion, the New York Attorney General, Letitia James, issued her own lawsuit, alluding to a breach by this firm by not registering to operate the tokens that circulate in its environment.
A particular fact in this situation is the consideration of ETH as a security, since there is still no full certainty of the classification that is given to it. While Ethereum was listed as a security by James, other authorities have given it a “different meaning.” This, by not finally determining to which category these assets would belong.
In any case, the cryptos continue to be within a panorama of uncertainty, with a series of events that impacts the valuation of the crypto market. The Seychelles-based firm’s lawsuit incident generated an 8% loss in the ETH price. This, shortly after the action carried out by the prosecutor became publicly known.
The legal issue with KuCoin is still not resolved. Letitia James’ “complaint” is one of several times authorities have highlighted a problem with this bag. In 2022, South Korean regulators accused her of conducting “illegal business activities,” properly evading proper registration of her.
“Uncertain” classification of tokens
Some authorities agree with the narrative by which Ethereum was listed as a security. SEC Chairman Gary Gensler views these tokens as securities, as does James. He has reiterated that his entity could retain such perception.
In turn, there are those who consider it a raw material, along with Bitcoin. Such is the case of the United States Commodity Futures Trading Commission (CFTC).
“The petition argues that ETH, like LUNA and UST, is a speculative asset that is dependent on the efforts of developers and third parties in order to provide benefits to holders,” Letitia James’ office said in a statement, in relation to the claim.
From the tax environment, they point out that KuCoin must be registered before trading the tokens on the exchanges. However, and while the “legal drawbacks” are still in force, Ethereum is “moving forward” with another update to its environment, according to a review by Key Alerts.
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