NY Supreme Court issues shutdown, $3M payout from Coinseed

A New York judge has issued an order to shut down cryptocurrency trading platform Coinseed, ending a years-long legal spat in which New York Attorney General Letitia James accused the company of bilking investors out of millions.

The court order, issued by New York State Supreme Court Justice Andrew Borrok against Coinseed and its CEO Delgerdalai Davaasambuu, permanently halted the company’s operations, James said.

It also ordered a $3 million judgment against Coinseed to be paid to defrauded investors, and put in place a permanent receiver who has taken control of the company’s website.

“For years, Coinseed and its CEO have engaged in egregious and fraudulent activities that have cheated investors out of millions,” James said in a statement.

“In defiance of court orders, this company has continued to operate illegally and unethically, holding investors’ funds hostage and underscoring the dangers of investing in unregistered virtual currencies,” she added.

James first sued Coinseed in February, accusing the company of charging hidden fees, making false claims and selling “worthless” digital tokens.

James also sued Coinseed Chief Executive Delgerdalai Davaasambuu and 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.

“Unregulated and fraudulent virtual currency entities, no matter how big or small, will no longer be tolerated in New York,” James said at the time.

The company was temporarily shut down in June through a court-ordered preliminary injunction, but James said Coinseed continued to sell unauthorized cryptos.

Since initially filing the suit, the AG’s office has received more than 175 complaints from investors who were concerned about protecting their assets from Coinseed, James said.

Coinseed, for its part, announced on Twitter that it’s “giving away free FLJ (F–k Letita James) token.”