2 years ago
169 FinanceFeeds -
New York Attorney General Letitia James secured a judgment against Coinseed and its CEO Delgerdalai Davaasambuu that permanently halts the cryptocurrency exchange’s operations and puts in place a permanent receiver to protect investors’ funds.
“The receiver has also taken control of the company’s website so that it may no longer be used as part of the defendants’ fraudulent schemes”, said Ms. James, branding Coinseed’s operations as illegal and fraudulent.
The court awarded a $3 million judgment against the defendants after a complaint filed in February for defrauding thousands of investors across the nation out of millions of dollars.
Despite the filed lawsuit, Coinseed kept its operations ongoing and allegedly ramped up its “fraudulent conduct by trading in investors’ accounts without permission and then blocking investors from accessing those accounts”.
In June, the New York County State Supreme Court granted Attorney General James’ motion for a preliminary injunction and the appointment of a temporary, court-appointed receiver with special powers to safeguard investments already made on the trading platform.
According to the NYAG, the exchange defied that preliminary injunction by creating, offering, and selling a new virtual currency, including to New York investors.
“For years, Coinseed and its CEO have engaged in egregious and fraudulent activities that have cheated investors out of millions. 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. We will continue to pursue all who attempt to abuse and manipulate the system and ensure investors are protected”, said NYAG Letitia James.
The judgment secured by Attorney General James permanently appoints the court receiver to obtain, safeguard, and return all assets invested and traded through Coinseed. The defendants are also ordered to pay up $3,061,511.
Coinseed and its two top executives stand accused of having sold digital asset securities called “CSD tokens” to hundreds of investors from at least December 2017 to May 2018. AG James said Coinseed’s fraud totaled more than $1 million.
“Unregulated and fraudulent virtual currency entities, no matter how big or small, will no longer be tolerated in New York. For over three years, Coinseed and its executives flagrantly and illegally violated New York state laws, but the corporate greed perpetrated by Coinseed while committing fraud against thousands of investors ends now”, she said at the time.
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