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New York Attorney General Letitia James has obtained a court order terminating the operation of the Coinseed crypto trading platform.
Technically, the order continues a mandatory break on Coinseeds trading, while also putting in place a court-ordered escrow to protect assets. The New York County State Supreme Court issued the order on June 4, also appointing Michelle Gitlitz as receiver.
Previous order
Last month, Attorney General James requested a temporary injunction, a preliminary injunction and the appointment of a receiver against Coinseed. She accused Coinseed of defrauding customers and excluding them from their cryptocurrency accounts.
According to James, Coinseed has seen an influx of withdrawal requests from investors looking to make gains on Bitcoin’s peak value. Rather than converting virtual currency into fiat currency to honor these claims, the defendants first reduced the daily withdrawal limit from $ 1,000 per day to $ 250 per day, and then eventually turned withdrawals completely off, the complaint said. initial of February 17, 2021.
The attorney general initially filed a lawsuit against Coinseed, as well as founder and CEO Delgerdalai Davaasambuu in February. However, she claims that since then Coinseed and its CEO have continued their fraud. Over the next three months, the Attorney General’s Office received more than 170 complaints from affected investors.
Meanwhile, Coinseed CEO Davaasambuu, for his part, is speaking out against bullying and harassment by the attorney general’s office. He claims his platform is no different from larger profile exchanges like Coinbase or Kraken. However, because his exchange is much smaller, he was targeted because he couldn’t afford to withstand a million dollar lawsuit.
Attorney General v Tether
This is not James’ first action against a cryptocurrency-based company. In February, his office struck a deal with Tether and the crypto exchange Bitfinex. The settlement came after an OAG investigation found that iFinex, the operator of Bitfinex, and Tether had made false claims about support for tether stablecoin and the movement of hundreds of millions of dollars between them. two companies.
The deal required Tether and Bitfinex to cease all other business activity in New York City, as well as to pay $ 18.5 million in penalties. However, Tether also claimed victory, saying that under the terms of the settlement we do not admit any wrongdoing. “
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