Crypto trading firm Coin Seed has decided to shut its doors for good following a lawsuit brought forth against it earlier in the year by New York Attorney General Letitia James. The company has been accused of fraudulent activity after moving customer funds without permission and for selling “worthless” tokens in what is alleged to have been a phony initial coin offering (ICO).
Coin Seed Is Closing Down for Good
In a statement, Del Davaasambuu – the CEO and co-founder of Coin Seed – explained in a recent interview:
I am announcing that I am winding down the business due to a lawsuit from the NYAG.
The suit against the trading platform was initiated on February 17 of this year. It is alleged that Coin Seed ultimately defrauded several investors out of millions of dollars through the sale of CSD tokens, the official cryptocurrency of the business. James later sought to prevent Coin Seed from selling any additional tokens, claiming that the firm had potentially taken investor funds and placed them into Dogecoin without openly discussing the move with those that had participated in the token sale.
A recent legal filing also alleges that Coin Seed took investor funds and allocated them into bitcoin without permission. The company is believed to have halted trading while the funds were being moved so customers could not remove their money from the Coin Seed platform. The bitcoin purchased with investor funds was later converted into Dogecoin.
This, in turn, led to nearly 200 complaints being sent to the New York Attorney General’s office, who felt that the incident required further examination. On June 7 of this year, the office obtained a court order allowing it to shut down Coin Seed for good based on evidence suggesting that the firm had engaged in illegal operations. James explained in a recent interview:
When platforms operating illegally in New York seek to trade on investors’ money, we will use every tool at our disposal to stop their unlawful actions.
Davaasambuu is thus far cooperating with the court order and closing the company’s doors, though he still insists that Coin Seed did not engage in any illicit behavior. He claims:
There are still no regulations about how to classify cryptocurrencies and what kind of licenses they should obtain to run a business in the United States. We do not even have a clear guidance on how to pay crypto-related taxes.
He has also stated that James is a “business abuser” and that she has been after him ever since the company held its ICO four years ago. He says:
We could not even list our token in other exchanges because of their constant pressures and bullying. Coin Seed is a small startup with little money, and we could not hire the good lawyers to fight them.