ETH Crashes 7% After NYAG Calls Ethereum A Security

Crypto markets plummeted Thursday after the New York Attorney General called Ether a security in a lawsuit against crypto exchange KuCoin.

Bitcoin and Ether fell more than 7% on the news. Tokens for BNB, Cardano and Polygon, the largest smart contract platforms by market capitalization after Ethereum, are down more than 6% from the previous day.

In its lawsuit, the New York Attorney General’s office accused KuCoin of acting as a securities broker-dealer and “falsely representing itself as an exchange.”

“KuCoin did not have the necessary license to operate in the state of New York. That representatives from the attorney general’s office were able to buy and sell cryptocurrency through the site constituted a clear violation of the law,” they said.

The lawsuit seeks to block New Yorkers’ access to KuCoin “until it complies with the law.”

In a news release, the office highlighted its categorization of ETH as a security.

“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,” the release notes.