The NYAG shuts down the Coinseed exchange for not getting consent from their customers to convert their funds into DOGE as we are reading more in our latest Dogecoin news today.
The New York Attorney General or NYAG shuts down Coinseed, a crypto exchange, for its dodgy dealings with Dogecoin and defrauding its customers after it converted their funds into DOGE without asking. NYAG Letitia James ordered Coinseed Inc to halt operations and pay $3 million in fines after it was accused of freezing and withdrawals as well as converting client funds into DOGE without consent. The exchange emptied its bank accounts and issued unlicensed securities.
Despite its previous court orders that stopped Coinseed from operating, James found that the company continued to partake in egregious and fraudulent activities while the case was still going:
“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 the services in June after a temporary restraining order and James sued Coinseed and its founder for defrauding thousands of investors out of $1 million. The US SEC also hit the company with a suit the same month for trading commodities without registering as a broker-dealer and misinforming investors. Assistant Attorney General Brian Whitehurst and Amita Singh have since reported receiving 170 complaints from counseled customers that claim that their wallet balances are lowered by tens of thousands of dollars since February.
The founder of Coinseed even promised to return the funds but he went silent since. In a related legal triumph, Michael Ackerman pleaded guilty to wire fraud in a scam that he orchestrated with two others a few years ago. The group ran a Q3 trading CLub promising 15% monthly return at the time and pled guilty to causing the investors to lose up to $30 million and he is now facing 20 years in jail if convicted.
As recently reported, New York State Attorney General Letitia James announced the charges against the crypto firm Coinseed for defrauding investors out of more than $1 million in the CSD token ICO that happened in 2017. The company allegedly raised more than $100,000 through the sale of these CSD tokens and the NYAG claims that the tokens had no real functionality and that they were not required to use the trading platform.