CFTC Fines Stablecoin Issuer Tether and Crypto Exchange Bitfinex $42.5 Million

October 15, 2021 Bitcoin.com

NYAG shuts down Coinseed for converting customer funds into DOGE without consent

September 14, 2021 Coin Telegraph

New York Attorney General Letitia James ends operations for Coinseed following complaints that client funds had been converted to DOGE without their knowledge.

The New York Attorney General (NYAG) has won a victory against crypto exchange Coinseed for its dodgy dealings with Dogecoin and defrauding its customers.

On Sept. 13 NYAG Letitia James ordered Coinseed Inc. to permanently halt operations and pay $3 million in fines after it had been accused of freezing withdrawals and converting client funds into Dogecoin (DOGE) without consent. The exchange also emptied its bank accounts and issued unlicensed securities, according to Bloomberg.

Despite previous court orders ordering Coinseed to cease operations, James also found that the company continued to partake in “egregious and fraudulent activities” while the case was ongoing, according to Law360:

“In defiance of court orders, this company has continued to operate illegally and unethically, holding investors' funds hostage and underscoring the dangers of investing in unregistered virtual currencies.”

The exchange purported to shutter its services in June following a temporary restraining order.

In February, James sued Coinseed and its founder, Delgerdalai Davaasambufor, for defrauding thousands of investors out of more than $1 million. The U.S. Securities and Exchange Commission (SEC) also hit the firm with a suit that same month for allegedly trading commodities without registering as a broker-dealer and misinforming investors.

Assistant Attorneys General Brian Whitehurst and Amita Singh have since reported receiving 170 complaints from Coinseed customers claiming that their wallet balances had shrunk by “tens of thousands of dollars” since February.

Davaasambuu had previously promised to return user funds but has been “completely radio silent” about the allegations, according to Singh.

In a related legal triumph on Sept. 10, Michael Ackerman pleaded guilty to wire fraud in a scam he orchestrated with two others in 2017.

The trio ran the Q3 Trading Club promising 15% monthly returns at the time. He pleaded guilty to causing investor losses of as much as $30 million and faces 20 years imprisonment if convicted in a January 2022 sentencing.

Crypto investment platform Coinseed shuts down amid NYAG lawsuit

June 8, 2021 Coin Telegraph

Coin Telegraph

Coinseed also created an ERC-20 token whose message is targeted at New York Attorney General Letitia James.

Coinseed, a crypto platform that enabled micro-investing in cryptocurrency assets for its users, has shut down its operations.

Delgerdalai Davaasambuu, founder and CEO of Coinseed, announced the decision via a statement published on the platform’s website.

Detailing his decision to shutter the business, Davaasambuu wrote:

“It is with an incredibly heavy heart, today I’m announcing that I am winding down the business due to a lawsuit from the NYAG (New York Attorney General).”

As previously reported by Cointelegraph, the Office of the New York State Attorney General brought fraud charges against Coinseed back in February. At the time, the NYAG accused Coinseed of misleading investors with the sale of unlicensed securities to the tune of over $1 million.

The NYAG’s legal assault on Coinseed was based on alleged violations of the Martin Act, a New York anti-fraud law. Under New York State Attorney General Letitia James, the office also used the Martin Act in its pursuit of crypto exchange Bitfinex and stablecoin issuer Tether.

In his message posted on the Coinseed website, Davaasambuu berated principal actors of the NYAG, including former New York State Attorney General Eric Schneiderman. The Coinseed chief accused the NYAG of double standards in its pursuit of the company.

Back in February, the Coinseed CEO dismissed the NYAG’s case against the company, stating that United States citizens were not involved in its 2017 initial coin offering.

Davaasambuu also accused the NYAG of profiting from the lack of clear-cut regulations in the state as a means of extorting settlement payments from cryptocurrency firms.

The Coinseed closure comes as the company no longer has access to payment providers following the NYAG lawsuit. Davaasambuu promised to return user funds at a later date.

As part of the closure announcement, the Coinseed boss also revealed an ERC-20 token seemingly created to spite James. Dubbed FuckLetitaJames (FLJ), the token will reportedly be airdropped to interested persons.

NYAG