The New York Attorney General (NYAG) won a case against Coinseed for its evasively tricky dealings with Dogecoin and misleading its customers.
On September 13, NYAG Letitia James released an order, commanding Coinseed to permanently terminate its operations. The crypto exchange has also been charged a fine of $3 million for suspending the withdrawals of its customers and converting them into Dogecoin without their consent.
As per a report published by Bloomberg, the exchange also spends all of its money on illegal securities.
Law360, in its report, has mentioned that earlier also, the court ordered Coinseed to halt its operation but it did not do so. James also found that the crypto exchange continued the fraudulent activities on its platform, while the case was ongoing.
Law360 further reported, “In defiance of court orders, this company has continued to operate illegally and unethically, holding investors’ funds hostage and underscoring the dangers of investing in unregistered virtual currencies.”
In June the exchange received a temporary restraining order to shut its services. The exchange has recently claimed that it has followed the orders and ceased the operation.
In February, James filed a lawsuit against Coinseed and its founder Delgerdalai Davaasambu for victimizing thousands of investors.
In the same month, the US Securities and Exchange Commission (SEC) also sued the crypto exchange accusing it to be trading commodities illegally.
Since then, Assitant Attorneys General Brian Whitehurst and Amita Singh have received up to 170 complaints from the users of Coinseeds.
The users, in their complaints, have mentioned that since February their wallet balance has been decreasing by “tens of thousands of dollars.”
Singh has recently stated, “Davaasambuu had previously promised to return user funds but has been completely radio silent about the allegations.
On September 10, in a related legal triumph, Michael Ackerman was pleaded guilty to wire fraud, which he orchestrated in 2017, with other people.
The trio operated the Q3 Trading Club and announced that the users will receive 15 percent monthly returns on their investment. During the investigation, it was found that Ackerman was guilty, as because of him the investors lost around $30 million.
If in January 2022, Ackerman is convicted of a crime then he would have to face 20 years imprisonment.