Coinseed shuts down after New York attorney general’s fraud allegations

The cryptocurrency platform Coinseed announced it would shut down amid fraud allegations from the New York State Attorney General (NYAG).

Read our announcement https://t.co/sEI8uUouVe. pic.twitter.com/03qaSlX5oR

— Coinseed (@coinseedapp) June 8, 2021

In February 2021, the NYAG, Letitia James, accused the startup and two of its top executives of deceiving investors for more than $1 million. According to authorities, in 2017 Coinseed raised $100,000 by selling 200,000 CSD tokens as part of ICO.

The agency called the coins useless. The department noted that the platform was not registered as a broker-dealer, and the project leaders misled users about their professional experience.

Executive Director Delgerdalai Davaasambuu said that Coinbase, Kraken and Gemini also do not hold broker-dealer licenses. In his view, the difference is that they have “enough money” to defend their interests in court.

“[Coinseed] made a fatal mistake simply by being in New York. […] Leave New York if you run a crypto business there,” the statement says.

Davaasambuu claims that the startup raised funds from “non-American investors,” none of whom allegedly complained about the ICO or the token. However, in the NYAG’s filing, she disclosed more than 130 allegations against Coinseed.

“As for user funds, they will be returned soon,” said Delgerdalai Davaasambuu.

He added that he created a free token named FLJ (Fuck Letita James), inviting people to join the airdrop. According to the top manager, the coin will appear on “various DeFi platforms.”

In April, Coinseed users accused the cryptocurrency platform of unauthorized conversion of their funds into Dogecoin

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