Attorney General Letitia James said KuCoin has not registered as a broker-dealer and has falsely represented itself as an exchange, and wants a permanent injunction to stop it from operating in New York until it complies with the law.

James said KuCoin lets investors trade popular virtual currencies such as ETH, LUNA and TerraUSD, and that her case is among the first by a regulator alleging that ETH is a security.

"One by one my office is taking action against cryptocurrency companies that are brazenly disregarding our laws and putting investors at risk," James said in a statement.

KuCoin did not immediately respond to a request for comment.

(Reporting by Jonathan Stempel in New York; Editing by Diane Craft and Daniel Wallis)