NY Attorney General Moves to Shut Down Crypto App Coinseed Over Fraud Claims

7 May 2021

New York state Attorney General Letitia James has moved to shut down automated crypto trading app Coinseed for allegedly continuing to defraud its users even as it faced pressure on multiple legal fronts.

  • Alleging continued fraud and citing new evidence, James filed a court motion on Thursday to freeze Coinseed’s trading activity and halt all operations.
  • In February, James accused Coinseed of bilking $1 million from investors through hidden fees, false claims and a flopped token. The U.S. Securities and Exchange Commission (SEC) hit Coinseed with token registration violations in a parallel suit.
  • Coinseed CEO Delgerdalai Davaasambuu, who is named in the NYAG suit, did not immediately respond to a request for comment from CoinDesk.
  • The new evidence includes allegations of unauthorized trading activity, filings show. 
  • Multiple users told James their crypto balances were converted to dogecoin without their consent. One said his $48,000 position became around $31,000 in DOGE without his knowledge:
From the NYAG complaint.
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.