"Unregulated and fraudulent virtual currency entities, no matter how big or small, will no longer be tolerated in New York," James said in a statement. Lkhagvadorj could not immediately be reached for comment.īoth defendants have residences in Long Island City, New York, but Davaasambuu has expressed an intention to return to his native Mongolia, James said. "It's very strange that they're blaming the very nature of how a startup works." "I'm 100% sure that the suit is full of false accusations," Davaasambuu said in an email, referring to James' lawsuit. Securities and Exchange Commission filed a related lawsuit against Coinseed and Davaasambuu over the tokens, which both regulators said were sold from December 2017 to May 2018. James also sued Coinseed Chief Executive Delgerdalai Davaasambuu and former Chief Financial Officer Sukhbat Lkhagvadorj, saying they overstated the midtown Manhattan-based company's management experience, while Lkhagvadorj misrepresented himself as a former Wall Street trader.Ĭoinseed's fraud totaled more than $1 million, according to James, who is also seeking restitution for investors. NEW YORK, Feb 17 (Reuters) - New York's attorney general filed a lawsuit on Wednesday to shut down the cryptocurrency platform Coinseed Inc for allegedly defrauding thousands of investors, including by charging hidden trading fees and selling "worthless" digital tokens.Īttorney General Letitia James said Coinseed traded cryptocurrencies such as bitcoin without registering as a broker-dealer, and sold "CSD" tokens without authorization to raise money for its mobile application startup.
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