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New York State Attorney General Letitia James at a press conference in New York City on May 21, 2021.
REUTERS / Brendan McDermid
The Coinseed cryptocurrency trading platform is shutting down after being sued by New York Attorney General Letitia James earlier this year for fraud.
“I am announcing that I am ending the activity due to a lawsuit filed by the NYAG,” said Del Davaasambuu, co-founder and CEO of Coinseed, in a statement found on the landing page of the website of the business.
The saga began on February 17 when James filed a lawsuit against the company for defrauding investors over $ 1 million through undisclosed charges and selling “worthless” CSD tokens, the cryptocurrency by Coinseed.
On May 6, James filed a lawsuit to stop Coinseed’s operations, alleging that the company had allocated investors’ money to dogecoin without authorization.
According to a file, Coinseed on April 16 converted all investors’ assets to bitcoin “without notice or authorization” and turned off all features of the app so they could not withdraw their money. Later that same day, Coinseed exchanged the bitcoins for dogecoins.
The GA’s office said it received more than 170 complaints from investors concerned about protecting their assets in the first three months after filing the complaint.
Then, on June 7, the attorney general’s office obtained a court order to end what it called Coinseed’s illegal and fraudulent operations.
“When platforms operating illegally in New York seek to trade in investor money, we will use all tools at our disposal to stop their illegal actions,” James said in a statement.
But Davaasambuu maintains his company has done nothing wrong.
“There are still no regulations on how to classify cryptocurrencies and the type of licenses they must obtain to operate a business in the United States,” he said in an article posted on the company’s website. “We don’t even have clear guidelines on how to pay crypto-related taxes.”
He added that after their initial coin offering in 2017, James and his office “constantly harassed” them.
“We couldn’t even list our token in other exchanges due to their constant pressure and bullying,” he said. “Coinseed is a small startup with little money and we couldn’t hire good lawyers to fight them in court which would cost millions of dollars.”
The CEO called James a “business mugger” who pursued him and his company until all of his team members left. Davaasambuu also blamed the series of events for his deteriorating sanity.
Davaasambuu added that users’ funds will soon be refunded once they hire a team of lawyers. Coinseed’s payment providers terminated their accounts in February, he said, due to the lawsuit.
He also said that the “fatal” mistake he made since starting his company in 2017 was living in New York City.
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