Coinseed Continued to Put Thousands of Investors’ Money at Risk Despite Ongoing Lawsuit

NEW YORK – New York Attorney General Letitia James has secured a court order that continues a mandated pause on the illegal and fraudulent operations of the cryptocurrency trading platform Coinseed, Inc. and puts in place a receiver to ensure the protection of investors’ money going forward. In February, Attorney General James filed a lawsuit against Coinseed, as well as founder and Chief Executive Officer (CEO) Delgerdalai Davaasambuu, — but, in the months since the suit was filed, Coinseed and its CEO not only continued their fraud, but commenced additional fraudulent conduct by trading in investors’ accounts without permission and then blocking investors from accessing those accounts. On Friday, the New York County State Supreme Court issued an order that grants a motion — filed last month by Attorney General James — and appoints Michelle Gitlitz, the global head of Crowell & Moring LLP’s Blockchain and Digital Assets practice, as a court-appointed receiver with special powers to safeguard investments already made on the trading platform. A previously issued temporary restraining order continues to block Coinseed and its CEO from making any further unauthorized trades.

“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,” said Attorney General James. “This order appoints a court-appointed receiver before any other investments are squandered by Coinseed and its CEO. We will not allow rogue operators to hold innocent investors’ funds hostage, while they deplete accounts and transfer virtual currency to an offshore, unregulated trading platform. We will continue fighting for the thousands of investors defrauded by Coinseed.”

In the first three months after Attorney General James filed her lawsuit, the Office of the Attorney General received more than 170 complaints from investors who were concerned about protecting their assets due to Coinseed’s fraudulent conduct. 

Friday’s motion appoints a receiver to oversee all assets traded through Coinseed in an effort to safeguard investments as Attorney General James’ lawsuit proceeds.

The matter is being handled by Assistant Attorneys General Brian M. Whitehurst and Amita Singh of the Investor Protection Bureau, under the supervision of Bureau Chief Peter Pope and Deputy Bureau Chief Shamiso Maswoswe. The Investor Protection Bureau is a part of the Division for Economic Justice, which is overseen by Chief Deputy Attorney General Chris D’Angelo and First Deputy Attorney General Jennifer Levy.