The New York Attorney General demands from the court to issue an order and to prevent Coinseed from trading users’ funds and stop all activity as we can see more in our latest crypto news today.
Coinseed converted user funds to DOGE and limited withdrawals which is why the New York Attorney General demands the court to prevent the platform from operating. The NYAG said that it also moved $1.2 million in customer funds to Gemini. Citing alleged fraud, the NYAG Letitia James sought a temporary restraining order and a preliminary injunction to bar the company from moving money and to protect the investors’ funds. NYAG initially charged and its top executives with fraud and stated clear intention to shut down the platform alleging that Coinseed illegally traded BTC and other cryptocurrencies that were basically worthless without even registering as a broker-dealer in the state. It also accused the company to profit of from the hidden fees.
Despite our lawsuit, @coinseedapp has continued to hold investors’ funds hostage, conduct unauthorized trades, and move virtual currency to an offshore trading platform.
I’m taking action to immediately halt the illegal operations of @coinseedapp as our lawsuit continues. https://t.co/ItfYTzv7Zi
— NY AG James (@NewYorkStateAG) May 7, 2021
The filing aligned with SEC charges against Coinseed and the CEO Delegerdalai Davaasambu with the complaint claiming that by not registering the CSD offering which raised $140,000 from investors, Coinseed denied the investors the info required for the offering to go public. Since the court filing, the NYAG said:
“The greed perpetrated by Coinseed and its CEO has not only continued, but grown. This company has continued to operate illegally — holding investors’ funds hostage and conducting unauthorized trades in investors’ portfolios, while depleting accounts and transferring virtual currency to an offshore, unregulated trading platform.”
In the filed motion, it said that the goal was to protect the investments that are left. The premise of Coinseed was simple. It was to take an app like Stash which rounds up each purchase but instead of investing that the “spare change” in stocks, they were put into crypto. The app which was removed from Google and Apple stores prompted users to auto-invest in 17 cryptos including BTC, ETH, and earn interest.
NYAG Lettita James, Source: WKBN News
The customers became agitated back in April with many alleging that Coinseed exchanged their deposits for DOGE without consent and were not allowing the users to withdraw their funds. DOGE was in a downward trend and lingered around $0.28. According to the court filing, investors that had high balances were met with pop-ups reading “Withdrawals have been disabled temporarily.”