Lelitia Ann ‘Tish’ James, who is a New York’s Attorney General for over two years now, finally took a legal action against the online crypto currency trading and exchange platform- Coinseed on Thursday, May 6, 2021,
New York state’s Attorney General accused the crypto exchange- Coinseed of allocating the investor’s money into dogecoin without their consent or permission.
As per the first filings viewed by Bloomberg on April 16, 2021, Coinseed converted all the assets of all the investors into Bitcoins without any notice or authorization or permission. Coinseed then disabled all the functionalities in the application so that no investor is able to draw their money out. The exchange then converted these bitcoins to Dogecoins on the same day. This was said to be “an extremely volatile virtual currency,” as per the filing. Dogecoin at that time was already experiencing a sharp sell-off
The content in the filing read as such- “[The Office of Attorney General] has received dozens of complaints from investors describing that [Coinseed] conducted these unauthorized trades and transferred all investor assets into dogecoin,”
One of the case filed by an investor regarding this on April 17, 2021, was also included as an example against the company. The investor accused that Coinseed converted all his cryptocurrency into Dogecoin without his consent or permission and blocked his ability to withdraw his own money.
The investor’s balance dropped directly from $20,000, the previous night to $7,000 the following morning.
Four more of such filings were filed against the company which shared similar issues and matters.
The Attorney General said in a statement- “Unregulated and fraudulent virtual currency trading platforms have no place in New York… Three months ago, we filed this case against Coinseed and its executives alleging that they violated New York state laws and illegally squandered investors’ monies. However, in the months since we filed our suit, the greed perpetrated by Coinseed and its CEO has not only continued but grown.”
Just around two months in February 2021, Lelitia James’ office filed a lawsuit against the crypto currency exchange- Coinseed claiming it as ‘fraud’, along with its other top two executives.
In February when the lawsuit was filed, Lelitia James accused the exchange company Coinseed of defrauding investors out of over around $1 million by means of undisclosed fees and also through the sale of “worthless” CSD tokens. CSD tokens are the exchange’s own crypto currency.