The New York Attorney General (NYAG) has won a lawsuit against crypto exchange Coinseed. Coinseed reportedly converted customer money into Dogecoin (DOGE), without asking permission first.
Freeze recordings
The crypto exchange has reportedly frozen withdrawals for several users after they converted their funds into Dogecoin. The crypto exchange has also reportedly emptied its bank accounts and issued unlicensed securities. The exchange is therefore under considerable accusations.
It is therefore not the first time that there has been a lawsuit against Coinseed. Previously, court orders had already been issued ordering Coinseed to cease their activities. The crypto company was also alleged to be engaging in “outrageous and fraudulent activities” while the lawsuit was already underway. Law360 says the following about this:
“Despite court orders, this company has continued to operate illegally and unethically, taking investors’ money hostage and highlighting the dangers of investing in unregistered virtual currencies.”
Thousands of investors affected
Last February, James sued Coinseed and its founder, Delgerdalai Davaasambufor, for defrauding thousands of investors. In total, the company is said to have stolen more than $1 million from its users. That same month, the U.S. Securities and Exchange Commission (SEC) also sued the company for allegedly trading commodities without registering as a broker-dealer and misinforming investors.
Since then, the company has received more than 170 complaints from users claiming that their wallet balance has shrunk by “tens of thousands of dollars” in some cases since February. Although Davaasambufor has promised to return all user funds in full, the company has been very quiet about the allegations. It is also reported that not everyone has all their money back yet. It is still unknown whether the company has been serious about this promise.