Another crypto payment platform Coinseed has come under the radar of the American officials after New York’s attorney general revealed that she is seeking a temporary, preliminary order to halt the company’s operations and protect the funds of millions of investors.
The platform, which enables the users to send spare change to their crypto wallets, was previously accused of fraudulent activities. In February this year, Letitia James, the NYAG, clearly stated her intentions to shut down the platform.
She accused the company of selling different crypto assets, including its native token CSD, without registration as a broker-dealer with the state officials. Plus, she also alleged that the company made millions in hidden fees.
Besides that, the allegations leveled by the NY attorney are identical to those in the SC complaint, which stated that Coinseed did not register its CSD offering that managed to raise $140,000 from several investors. The American watchdog further added in its complaint that the crypto company denied investors the information for this offering.
In April, the user agitation grew when many came stating that their investments were exchanged for Elon Musk’s favorite Dogecoin without their consent. During that time, the meme coin was at a downward trend, with a value of $0.28.
In addition to this, the document submitted in the court suggested that the user with more than $95,000 in their wallets came across a pop-up notification suggesting that the withdrawals have temporarily been suspended.
On the other hand, since the first lawsuit, the company has not made any public comment on the worsening situation and concerns expressed by the government agencies. Reportedly, its owner is believed to have fled the country. Meanwhile, the law firm representing Coinseed had said that it no longer wanted to represent the crypto company.
New York is considered one of the strictest places for crypto-related firms. The state officials recently settled a dispute with Bitfinix and Tether after both companies agreed to pay $18 million and halted their services in the state.