New York State Attorney General Letitia James during a news conference in New York on May 21, 2021.
REUTERS / Brendan McDermid
Coinseed cryptocurrency trading platform is shutting down after it was sued for fraud by New York Attorney General Letitia James earlier this year.
“I am announcing that I am ceasing business as a result of a lawsuit filed by NYAG,” said Del Davaasambuu, Coinseed co-founder and CEO, in a statement posted on the company’s website landing page.
The saga began on February 17 when James filed a lawsuit against the company for defrauding investors of more than $ 1 million through undisclosed fees and through the sale of “worthless” CSD tokens, Coinseed’s cryptocurrency.
On May 6, James took legal action to stop Coinseed from operating, claiming the company had saved investors’ money in Dogecoin without permission.
According to a filing, on April 16, Coinseed converted all investors’ assets to Bitcoin “without notice or approval,” and disabled all functionality in the application so they could not withdraw their funds. Later that same day, Coinseed exchanged the bitcoins for Dogecoin.
The AG’s office said it had received more than 170 complaints from investors in the first three months after filing the lawsuit about concerns about the protection of their assets.
Then, on June 7th, the Attorney General’s office obtained an injunction to stop Coinseed’s illegal and fraudulent operations.
“If platforms operating illegally in New York attempt to trade investors’ money, we will use every tool we can to stop their illegal activity,” James said in a statement.
But Davaasambuu claims his company didn’t do anything wrong.
“There are still no regulations in place on how cryptocurrencies are classified and what kind of licenses they should get in order to run a business in the US,” he said in a post on the company’s website. “We don’t even have a clear guide on how to pay crypto-related taxes.”
He added that James and her office “constantly harassed” her after her first coin offer in 2017.
“We couldn’t even list our token on 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 “molester” who chased him and his company until all of his team members were gone. Davaasambuu also blamed the series of events for the collapse of his mental health.
Davaasambuu added that users’ funds will be returned soon once they hire a team of lawyers. Coinseed’s payment providers terminated their account in February due to the lawsuit.
He also said the “fatal” mistake he has made since starting his company in 2017 lived in New York.
