The New York Supreme Court upheld a motion to terminate cryptocurrency service Coinseed, filed by State Attorney General Letitia James.
The owners of the automated cryptocurrency investment application Coinseed received a permanent shutdown order from the New York State Supreme Court. In May, New York Attorney General Letitia James filed a petition to terminate Coinseed in court to protect investor funds.
The court appointed a liquidator to protect investor funds and took control of the Coinseed website to prevent the service from being used for other fraudulent schemes. The court also ruled that Coinseed must pay $ 3 million to victims of fraud and transactions carried out by the service as an unregistered commodity trader.
Recall that the New York Attorney’s Office and the US Securities and Exchange Commission (SEC) accused Coinseed executives of fraud in February. According to the lawsuit, the creators of the Coinseed app lured $ 1 million from investors through hidden fees, false claims and the issuance of a CSD token, which in fact “had no functionality” in the company’s mobile app.
In June, the court issued a suspension order for Coinseed based on a preliminary injunction. However, prosecutors say Coinseed continued to engage in illegal activities.
“Contrary to court orders, this company continued to operate illegally and unethically, withholding investor funds and highlighting the dangers of investing in unregistered virtual currencies,” said Laetitia James.
In April, Coinseed users stated that they could not withdraw money and that the funds were converted into a falling DOGE without the knowledge of the owners.