This means war: SEC Charges Coinseed with fraud, AG James warns unregistered cryptos

Rick Steves

The statement must be sending chills down many spines in New York, a state that adopted cryptocurrencies early on. While many firms have been granted regulatory approval to operate, it is unclear how many unregistered broker-dealers are still out there. We will find out soon enough.

The Securities and Exchange Commission has charged against crypto trading app Coinseed and its co-founder and Chief Executive Officer, Delgerdalai Davaasambuu for the platform’s offer and sale of digital asset securities.

The SEC alleged that Coinseed and Davaasambuu sold digital asset securities called “CSD tokens” to hundreds of investors, including investors based in the US, from at least December 2017 to May 2018. The complaint filed in federal district court in Manhattan claims that no registration statement for the offering was filed and that the offering failed to satisfy any exemption from registration.

“By failing to file a registration statement, Coinseed denied prospective investors the information required for such an offering to the public. As alleged, through the offering Coinseed raised at least $141,410”, said the official statement, which added the SEC is seeking permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties.

Attorney General Letitia James said Coinseed’s fraud totaled more than $1 million: “Unregulated and fraudulent virtual currency entities, no matter how big or small, will no longer be tolerated in New York. For over three years, Coinseed and its executives flagrantly and illegally violated New York state laws, but the corporate greed perpetrated by Coinseed while committing fraud against thousands of investors ends now.

“This lawsuit should send a clear message to all those trading cryptocurrencies that my office will work tirelessly to ensure transparency and fairness in the market and will not hesitate to protect investors’ wallets against all those who seek to defraud them”, Ms. James added.

The statement from Attorney General James speaks volumes of what is driving the SEC to take down Coinseed, who failed to register as commodities broker-dealers through their trading app. “Millions around the country and the world today use cryptocurrencies as decentralized digital currencies — unlike real, regulated government currencies, including the U.S. dollar — to buy goods and services, often times anonymously, through secure online transactions”, said Attorney General James.

“Unregulated and fraudulent virtual currency entities, no matter how big or small, will no longer be tolerated in New York. For over three years, Coinseed and its executives flagrantly and illegally violated New York state laws, but the corporate greed perpetrated by Coinseed while committing fraud against thousands of investors ends now.

“This lawsuit should send a clear message to all those trading cryptocurrencies that my office will work tirelessly to ensure transparency and fairness in the market and will not hesitate to protect investors’ wallets against all those who seek to defraud them”, AG James added.

The statement must be sending chills down many spines in New York, a state that adopted cryptocurrencies early on. While many firms have been granted regulatory approval to operate, it is unclear how many unregistered broker-dealers are still out there. We will find out soon enough.

Read this next

Digital Assets

Bybit under pressure from Ontario regulator after being forced out of the UK

Bybit has recently been forced to close its operations in the United Kingdom following the ban on Crypto CFD products earlier this year. 

Digital Assets

XRP, BTC, ETH, ADA, DOGE rebound despite being ‘rat poison’ to nearly half of surveyed by JP Morgan

While JP Morgan and its partners are institutionally staying back from the crypto markets, the investment bank is very much into blockchain technology.

Industry News

FTX and MLB partner together for brand awareness and innovation

FTX, one of the largest crypto exchanges in the world that has been on an expansion spree, has announced that it has tied up with Major League Baseball (MLB) in the US for brand awareness.

Digital Assets

Polygon (MATIC) and Aave grant recipient tie up to incentivise new users with rewards

Polygon (MATIC), a Layer 2 solution on Ethereum, has tied up with Aave grant recipient RabbitHole to incentivise new users for making deposits into Polygon.

Digital Assets

John McAfee, software pioneer and a big crypto supporter, dies in Spanish jail

John McAfee, the founder of the anti-virus software which was a household name a couple of decades back and a huge crypto enthusiast, has died in a Spanish jail on the same day that a court allowed him to be extradited to the US.

Industry News

TraderEvolution Global partners with TradingView: Brokers to enjoy direct access

The multi-asset platform is now connected to TradingView’s network of venues, liquidity pools, and asset classes 

Digital Assets

Visa and Paypal invest heavily into $300 million blockchain fund

Visa and Paypal, behemoths that have been known supporters of the blockchain domain, have invested in Fund V of Blockchain Capital.

Opinion

FX Trading is a business: If you want results, act like a professional. Go Prime of Prime!

Trading the markets is a business. It is no wonder that the ones that see it as gambling are willing to trade against the house, but retail traders that want results, they must act like professionals.

Digital Assets

Celsius acquires MVP workshop as it looks to build more on crypto

Celsius, one of the largest cryptocurrency lending and rewards earning platforms, has announced that it has acquired the development division of MVP Workshop as it looks to expand its development team.