A crypto investment company, Coinseed, has been charged by New York for numerous offences, including fraud. New York State Attorney General Letitia James is charging the platform for deceiving investors.
Fraud of Over $1 Million
The NYS Attorney says Coinseed defrauded investors of about $1 million, during its ICO. The crypto company allegedly made up to $100,000 dollars from the sale of its native token, CSD. The charges were announced yesterday in a statement from the Attorney’s office.
James explains that the tokens has no real use in the company’s app. They were not used in trading or activities in Coinseed accounts, making them ‘worthless’. The ICO, or Initial Coin Offering, took place in 2017. New York State wants the crypto company to refund all investment put into its coin offering.
Coinseed is also accused of trading crypto without due regulation. The company failed to register as a broker-dealer in New York, making its activities completely unlawful. Two Coinseed executives: CEO Delgerdalai Davaasambuu and Chief Financial Officer Sukhbat Lkhagvadorj, are also being sued. According to the lawsuit, Lkhagvadorj “misrepresented himself as a former Wall Street trader.” Investigations revealed that the CFO has actually never traded commodities.
The Attorney General wants Coinseed to be completely shut down, as she says it has been operating illegally for around four years. “Unregulated and fraudulent virtual currency entities, no matter how big or small, will no longer be tolerated in New York,” James insists.
Fake ICOs are Not New
The New York Attorney General is not the only one filling a lawsuit against the crypto company. The SEC has also filed a similar lawsuit against Coinseed, which the NYAG office acknowledged. The attorney thanked “the SEC for their cooperation” in the ongoing lawsuit.
During the crypto boom in 2017, a lot of companies rolled out ICOs. While some were genuine projects that have since yielded results, others turned out to be nothing but smoke screens. In fact, according to a research by Bloomberg, 80% of ICOs held in 2017 were scams. The new lawsuit would determine if Coinseed was part of the 80%, or is part of the good 20%.