Users of the automated investment app Coinseed are unable to withdraw money and claim that they have been converted to a falling DOGE without their knowledge.
Coinseed users claim that the company converted customer deposits to Dogecoin without their consent and does not process withdrawal transactions. The company does not respond to inquiries and customers can only watch how the DOGE collapsed by 30% in a week destroys their savings.
“I am sick of this situation,” Reddit user Ace201613 wrote in the r / CoinseedSCAM thread, which was created by deceived service clients. In the Facebook group of the same name, two clients report losses in excess of $ 100,000, and dozens more complain about the loss of smaller amounts. About 50 Facebook users have expressed interest in the class action lawsuit against Coinseed.
In February, the New York Attorney’s Office and the US Securities and Exchange Commission (SEC) accused the creators of the Coinseed app of defrauding investors and violating securities laws. The prosecutor’s office claimed that the creators of Coinseed lured $ 1 million from investors through hidden fees, false statements and the issuance of a CSD token, which in fact “had no functionality” in the company’s mobile application.
New York’s attorney general began receiving complaints about allegedly erroneous conversions of customer deposits into other cryptocurrencies on April 16, according to documents filed by Coinseed lawyers at Morrison Cohen law firm.
At the same time, Coinseed’s lawyers want to abandon the case. In a statement last week, Morrison Cohen noted that Coinseed’s founders are not responding to messages, delaying “important decisions” on upcoming cases. Morrison Cohen announced its intention to end its relationship with Coinseed on April 21.
“It is clear that the relationship between attorney and client is irrevocably destroyed,” wrote Morrison Cohen partner Jason Gottlieb.
The Coinseed app allowed clients to invest small amounts in cryptocurrencies. Users could purchase any of the 17 cryptoassets supported by the app, and Coinseed managed their investments. The model seemed to work well, with several app clients on the r / CoinseedSCAM thread reporting a tenfold increase in their portfolios. According to a 2019 report filed with the SEC, Coinseed had $ 92,537 in debt by March of that year.
The firm was founded in 2017 by two Mongolian students who studied in New York: CEO Delgerdalai Davaasambu, who wrote the code and owns 80% of the company, and CFO Sukhbat Lkhagvadorj, who handled finance. and owns 20% of the shares. According to documents filed by Coinseed with the SEC, Lhagwadorj has worked “for several Wall Street firms, including a broker-dealer and a securities advisory firm.”
However, the New York attorney general said that Lhagwadorj “never traded securities or commodities.” Morrison Cohen believes Davaasambu has returned to Ulaanbaatar. The founders of the startup did not leave contact addresses.
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