The Coinseed CEO pulled his customers over the table until the last day. Now, crypto exchange hunter Letitia James has obtained a verdict from the New York Attorney General (NYAG).
Who would have thought that Coinseed would be heard again? According to the company’s founder, Delgerdalai Davaasambuu, the store should have been closed since June 2021. Back then explained Davaasambuuauf that in his eyes the crypto exchange is being illegally sued by the New York Attorney General (NYAG) – and that he must therefore cease his business. Without even beginning to obey NYAG, he invested his customers’ money in Dogecoin.
The drama started in February this year. When he was accused by NYAG of having stolen investors’ money by means of a faked profit potential.
It is with an incredibly heavy heart that I announce today that I am ceasing to operate due to a lawsuit filed by NYAG.
Delgerdalai Davaasambuu, Coinseed Declaration, June 2021
At that time he promised to repay the money to his users at a later date. However, due to the lawsuit, he no longer had access to payment providers. At the same time he released a coin with the name “Fuck Letitia James” (FLJ) and thus immediately and apparently without any remorse, opposed the demands of the Attorney General.
Clever or just bold?
However, he reconsidered the termination of his business and invested among other things the money of his creditors: inside in Dogecoin. The inability of the payment providers didn’t seem to bother him either. He continued his fraudulent activities despite a restraining order. In the on 13. September The approved lawsuit published in 2021 now reveals the absurdities:
In the months since the lawsuit was filed, Coinseed and its CEO have continued their scam and started additional fraudulent behavior by trading investor accounts without permission and then banning investors from accessing those accounts.
Public Prosecutor’s Office press release dated September 13, 2021
Davaasambuu has possible withdrawals frozen (which is unlawful, but at least the money would then be in the account) and has invested the existing money in the meme currency Dogecoin without the consent of his customers – he has to answer in court for this.
However, Bloomberg goes one step further and explains that Davaasambuu deliberately emptied the bank accounts and previously issued an unlicensed security. The customers could only have watched how their wallet balances had “shrunk by tens of thousands” since February.
Contrary to court orders, this company continued to act illegally and unethically, holding investors’ funds hostage and highlighting the dangers of investing in unregistered virtual currencies. We will continue to pursue anyone who tries to abuse and tamper with the system and make sure investors are protected.
Public Prosecutor’s Office press release dated September 13, 2021
The New York prosecutor Letitia James announced to the crypto exchanges in the New York area in February that they would either have to play according to the rules or would be shut down by the institution. Coinseed is not the first exchange that it takes on a pincers. On the basis of the Martin Act, she has already ordered Bitfinex and Tether to pay millions and driven them out of the state of New York.
What happens to Coinseed now?
Coinseed must now really cease operations and pay a fine of three million US dollars. What happens to Davaasambuu is not yet clear. However, the outlook is likely to be Swedish curtains.