CoinEx fined $2 million in Québec, Canada

Rick Steves

“This new decision follows the important decision obtained in earlier this year and is part of the AMF’s offensive against crypto asset trading platforms operating illegally in Québec that have not entered into pre-registration undertakings.”

Autorité des marchés financiers (AMF) from Québec, Canada, has penalized operators of the crypto asset trading platform for non-compliance with Québec’s securities and derivatives legislation.

Earlier this month, the Financial Markets Administrative Tribunal sanctioned CoinEx Global Limited and related entities, imposing a $2 million penalty.

The Tribunal also fined Haipo Yang, CEO of CoinEx, $300,000 for similar violations. The Tribunal ordered the permanent blocking of access to, effective two months post-decision. Operators must inform users about the closure and advise them to withdraw assets and close accounts.

CoinEx operated without AMF registration

CoinEx entities and related parties operated as securities and derivatives dealers without AMF registration. They distributed securities and marketed derivatives without AMF-approved prospectuses or exemptions.

Éric Jacob, AMF’s Enforcement Executive Director, stressed the importance of compliance for crypto asset trading platforms in Québec. “This new decision follows the important decision obtained in earlier this year and is part of the AMF’s offensive against crypto asset trading platforms operating illegally in Québec that have not entered into pre-registration undertakings. The AMF will continue its coordinated efforts with other members of the Canadian Securities Administrators to ensure that crypto asset trading platforms comply with Canadian securities and derivatives legislation.”

The Tribunal highlighted the need for substantial penalties to ensure adherence to securities legislation and protect investors. Authorized crypto asset trading platforms in Québec are listed on the AMF website. The AMF serves as Québec’s financial sector regulatory and oversight body, ensuring compliance and investor protection.

CoinEx ordered to pay $1.7 million in New York

The fine follows a $1.7 million disbursement to New York authorities earlier this year after settling with the Attorney General. The agreement resolves the NY lawsuit against CoinEx and requires the company to refund thousands of New York investors more than $1.1 million and pay more than $600,000 in penalties to the state.

CoinEx is now banned from offering, selling, or purchasing securities and commodities in New York and is prohibited from making its platform available in the state. The crypto platform publicly announced that it would withdraw its platform and services from the United States.

New York law requires securities and commodities brokers to register with the state, which CoinEx failed to do. An investigator from the Office of the Attorney General (OAG) was able to create an account with CoinEx using a computer with a New York-based IP address to buy and sell digital tokens although CoinEx was not registered with the state.

CoinEx recovering from $70 million hack

CoinEx has most recently been the target of a $70 million hack. In September, the Hong Kong-based cryptocurrency exchange revealed that compromised private keys allowed hackers to steal over $70 million of tokens. The firm claims this amount represents a small percentage of its total assets under management. CoinEx stated that affected users will be compensated entirely for any lost funds.

Since then, the CoinEx team has been working to build and deploy a new wallet architecture to restore impacted users and functionality of the platform.

Chief executive Haipo Yang published an open letter in October “the biggest challenged” the crypto exchange faced since being launched.

“2023 has been a challenging year for the crypto industry — increasing regulation, market crashes, and shutdowns. Few survive the endless crypto winters. In our 6 years, CoinEx has weathered storms side-by-side with you. Our progress wasn’t always smooth but we persisted. Your support is what fuels our commitment to stable, sustainable growth. Users come first. With you, we will grow further. Entrepreneurship is tough; perseverance, tougher. CoinEx has weathered peaks and valleys, thanks to our users’ enduring support.”

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