Cryptocurrency service Coinseed is shutting down. This was stated by the founder of the project Delgerdalai Davaasambuu. The site’s home page states that the decision to shut down the service was made after the New York Attorney General (NYAG) filed a lawsuit against it.
“I created Coinseed as a new generation of cryptocurrency investments,” says Davaasambuu.
A lawsuit against Coinseed and the founders of the project was filed by NYAG amid complaints from customers of the service about the unauthorized conversion of cryptocurrencies to DOGE. According to unofficial information, the financial damage can amount to more than $ 900 thousand. At the same time, about $ 650 thousand falls on just one user.
However, it appears that NYAG’s lawsuit is unaffected by this incident. Instead, Attorney General Laetitia James accused the project of an illegal initial coin offering (ICO). Davaasambuu admits that as part of the ICO, the project collected “a good amount of money. ” However, he assures that the bulk of their investors are Europeans.
“We were living the American Dream. And then we realized that we had made a fatal mistake by settling in New York, ”says Davaasambuu.
When talking about New York, the Coinseed founder refers to the Martin Act, New York’s anti-fraud law. Davaasambuu says the law gives NYAG unlimited powers, including suing and investigating a company in New York, even if there were “no complaints” about it.
Coinseed Exception
According to the founder of Coinseed, at some point NYAG first offered to close the investigation against the service for $ 100,000. However, later the Attorney General’s Office refused to make a deal. Also, the Attorney General’s office accuses Coinseed of providing unregistered broker services.
“According to NYAG, Coinbase, Kraken and Gemini are also unregistered brokers as they do not have licenses to do so. The only difference is that they have enough money to defend their interests in court, ”Davaasambuu said.
He also promised to return the money to users soon, noting that he is already “consulting” with law firms on this matter. Until then, users will not be able to access their assets.
Following user complaints, Jason Gottlieb, a partner at Coinseed law firm Morrison Cohen, announced his intention to terminate Coinseed’s contract. The company argued that Coinseed did not systematically get in touch on “big decisions.” Himself Davaasambuu did not comment on these allegations in any way.
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