New York Attorney General Letitia James filed a lawsuit Thursday against KuCoin, a virtual currency trading platform, for allegedly operating without proper licensure and registration as a securities and commodities broker-dealer.

The lawsuit argues that Ether (CRYPTO: ETH), one of the largest cryptocurrencies available, is a security.

What Happened: The New York AG’s lawsuit sent the cryptocurrency market into a freefall, with almost all of the major cryptocurrencies, including Bitcoin (CRYPTO: BTC), Ether, Binance (CRYPTO: BNB), Ripple (CRYPTO: XRP), Cardano (CRYPTO: ADA) logging losses in between 5%-7%.

James alleges that KuCoin falsely represented itself as an exchange and sold unregistered securities in the form of KuCoin Earn, its lending and staking product.

A press release issued by the New York AG states that James' office was able to create an account on KuCoin using a New York-based IP address and buy and sell digital tokens, for which the company charged a fee.

Also read: Is The Crypto Winter Really That Bad? Blockchain.com Cites Market Conditions In Asset Management Arm Suspension

“One by one my office is taking action against cryptocurrency companies that are brazenly disregarding our laws and putting investors at risk … All New Yorkers and all companies operating in New York have to follow our state’s laws and regulations. KuCoin operated in New York without registration and that is why we are taking strong action to hold them accountable and protect investors,” James said in a statement. 

Through the lawsuit, Attorney General James seeks to stop KuCoin from operating in New York and to block access to its website until it complies with the law.

She also seeks a court order that stops KuCoin from allegedly misrepresenting itself as an exchange and directs the company to enact geo-blocking based on IP addresses and GPS location to prevent access to its mobile app, website and services from New York.

The Background: Last month, James acted against CoinEx for similarly failing to register as a securities and commodities broker. In January, she recovered $24 million from the cryptocurrency platform Nexo for allegedly operating illegally and sued the former CEO of Celsius (CRYPTO: CEL) for allegedly defrauding investors and concealing the company’s dire financial condition.

Next: Crypto Fallout Claims Another Banking Victim: How The Industry Is Reacting

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