The long-dragged suit between Coinseed, a cryptocurrency platform and the office of the attorney general of New York has officially ended with the crypto app losing the court battle. Yesterday, a court ordered the platform to pay $3 million in relief to its investors whilst also barring it from operating in New York.
Earlier in the year, the crypto outfit was accused of providing crypto-related services in New York without registering with the appropriate body as stipulated in the Martin Act. In February, a court case was filed against Coinseed and its team never responded to the NYAG’s complaint.
Coinseed was also accused of defrauding its investors by selling off their securities and assets, acting as a broker-dealer to lure innocent investors into their scheme, and pouring their investors’ funds on dogecoin.
Attorney James said that “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 crypto firm and its founder Davaasambuu were levied with a violation of a court order asking them to stop all activities at once in June. However, the office of the attorney general, Letitia James, wrote, “Coinseed and its CEO defied that preliminary injunction by creating, offering, and selling a new virtual currency to New York investors and failed to respond to Attorney General James’ complaint.”
Over $3 million is expected to paid in relief funds. to investors. Also, the platform would be paying court fines for violating a court order, and a permanent ban from all crypto-related operations in New York. In addition, attorney James said that an appointed permanent receiver would take over the Coinseed website and app to put the investors first and protect their funds.