Authorities in US Seek Court’s Permission to Shut down Alleged Crypto Fraud Trading Exchange

The Office of Attorney General for New York had labeled Coinseed – a crypto trading platform in the US – as crypto fraud. AG Letitia James has moved to Court for obtaining appropriate orders for shutting down the crypto trading platform before further damage is caused upon innocent investors.

The New York’s AG Letitia James against possible crypto fraud platform, Coinseed, has taken the legal initiative. Through the initiative, the AG’s Office has sought Court’s indulgence in obtaining appropriate restraining orders against the fraud platform. The Office wants to shut down the trading platform on the pretext that it has been defrauding the public through a crypto Ponzi scheme. Ad interim relief has also been sought from the Court for halting the operations and business activity of Coinseed.

The Court filing by the AG Office has been filed in the Court on 6 May 2021. In the Court filing, it has further been prayed that official liquidators be appointed forthwith. In addition, the Office has further prayed to the Court for attaching the assets of Coinseed. The attachment of property has been sought because in case the allegations against Coinseed are proved, then the loss can be made good.

In the meanwhile, CEO of Coinseed too has been impleaded as the main accused of the alleged crypto fraud. It has been suggested that illegal trading has been done on the specific instructions of the company’s CEO. Orders of putting the CEO on Exit Control List too have been sought from the Court. In the meantime, Letitia James has further asked Court to appoint a receiver until the inquiry is not concluded.

It is reported that the Receiver has been asked for because he would be given the task to monitor crypto trading activities.

The matter is now pending since February 2021 before a US Court in New York. Coinseed’s founder as well as CEO, who both are one person, Delgerdali Davaasambuu, too has been named in the lawsuit as a defendant. It was alleged in the Court filing by the State that the trading platform is originally a fraud scheme. It has been obtaining funds from the investors for onward investment in the crypto assets. However, even after receiving huge amounts of monies, the investors have not been provided with their promised share and profits. This impliedly suggests that there are chances that it is yet another crypto fraud scheme initiated for plundering public money.

Yet even after Court filing, no restraining order was passed against the trading platform. Instead, the company’s business has been growing in manifold since then. So far, 103 complaints lodged by individuals have been received in the Office of AG. They are all concerned for the security and safety of their funds that they have entrusted to Coinseed.