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US Authorities Take Action to Shut Down Crypto Trading Platform Allegedly Defrauding Thousands of Investors

The New York Attorney General and the US Securities and Exchange Commission (SEC) have filed charges against a cryptocurrency trading platform that allegedly defrauded thousands of investors for more than $1 million.

US regulators issue currencyIllegal crypto currency exchange platform

New York Attorney General Letitia James on Wednesday filed a lawsuit to shut down the cryptocurrency exchange platform owned and operated by Coinseed Inc. The lawsuit, filed in the Superior Court of New York County, alleges that Coinseed operated an illegal cryptocurrency trading platform that defrauded thousands of investors across the country of more than $1 million.

The complaint names Coinseed Inc. and its founder and CEO Delgerdalai Davaasambuu as defendants, and CFO Sukhbat Lhagwadorj as defendant.

According to a statement from the New York Attorney General’s Office, Attorney General James is taking legal action to shut down the cryptocurrency exchange platform and recover the swindled funds of thousands of investors. The announcement makes clear that the Mint has willfully ignored many laws governing the registration of securities and property:

Attorney General James wants to prevent Coinseed and two separate defendants from continuing as unregistered commodity brokers through their mobile app, as well as to recover Coinseed’s worthless cryptocurrency investment, the CSD token.

The Attorney General alleges that Coinseed and the individual defendants illegally traded cryptocurrencies such as bitcoin without being a registered broker-dealer in New York, while failing to disclose certain commissions associated with trading virtual currencies on behalf of their investors.

The complaint further alleges that the defendants attempted to finance their fraudulent enterprise by raising funds through the offering of unregistered securities and by luring investors with false statements about their professional expertise and management positions. The token sale took place at some point between December 2017 and May 2018. Hundreds of investors participated, including those in the United States.

On the same day, the SEC announced charges against Coinseed Inc. and its CEO for violations of registration requirements related to offering and selling securities as digital assets. The Securities and Exchange Commission is demanding a permanent cease-and-desist order, indiscretionary and prejudgment interest, and civil penalties, the regulator said.

What do you think of the allegations against Coinseed? Let us know your comments in the section below.

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