The crypto firm Coinseed has just got charged with fraud charges by the New York Attorney General Letitia James who announced the charges today as we are reading more in our crypto news.
James alleges that the company “defrauded thousands of investors across the nation out of more than $1 million” and she sues both the company and the two top executives. New York State Attorney General Letitia James announced the charges against the crypto firm Coinseed for defrauding investors out of more than $1 million in the CSD token ICO that happened in 2017.
The company allegedly raised more than $100,000 through the sale of these CSD tokens and the NYAG claims that the tokens had no real functionality and that they were not required to use the trading platform. The state also said Coinseed traded without previously registering as a broker-dealer. The statement said:
“Attorney General James seeks to stop Coinseed and the two individual defendants from further operating as unregistered commodities broker-dealers through their mobile application, as well as return investments of Coinseed’s worthless cryptocurrency, the CSD token.”
In the court documents, the state claims that the crypto company violated the Martin Act which is a New York-anti fraud law when it unlawfully sold unregistered securities in the form of a digital token while still making misrepresentations about the management team. James invoked the Martin Act in the state’s lawsuit against Bitfinex and Tether which is still ongoing. James filed another lawsuit against two of the company’s executives, Delegardalai DAvaasambu and Sukhbat Lkhagvadorj.
The documents claimed that Lkhagvadorj “mispresented himself as the former Wall Street trader when in truth he had never traded securities or commodities.” Lawsuits that are going on for ICOs and tokens are nothing new to the crypto industry. the most popular case is still the case SEC vs Ripple Labs whose token XRP has crashed since then and plenty of exchanges delisted it.
Speaking of the NYAG, Tether and Bitfinex produced more than 2.5 million documentation pages as a response to the NYAG request. iFinex is the parent company of the Tether and Bitfinex who are the issuers of the eponymous stablecoin Tether coin which provided millions of documentation to the New York Attorney General in regards to the investigation with it getting into the alleged lack of disclosure over the missing $850 million which was seized by police from the banking partner.
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