As per the latest reports, Coinseed Inc. has just been sued by Letitia James, who is the Attorney General for the New York State. According to the Attorney General, Coinseed Inc., which is known for being a popular cryptocurrency investment platform has been involved in fraud.
The Attorney General has accused the crypto-investment firm of defrauding several investors from the United States. As a result, the platform managed to exploit more than a million from the investors.
In the lawsuit, Letitia has alleged the company Coinseed Inc., its CEO (DelgerdalaiDavaasambu), and the former CFO (SukhbatLkhagvadorj). The plaintiff has alleged the parties to be involved in fraudulent activities such as conducting unlawful trades as well as defrauding investors with the investments.
It has been revealed that the firms were involved in fraudulent activities from the end of the year 2017 and all the way up to May of 2018.
In the allegation, Letitia stated that in order to increase the growth of the business, Coinseed proceeded onto selling digital tokens instead of selling stock to raise funds.
The alleged achieved this by making the investors believe that the firm was going to raise funds through the ICO, which will be used for the expansion of the business and the growth of the ecosystem.
The allegation further suggests that by carrying out such activity, Coinseed proceeded onto violating the Anti-Fraud Act from New York, The Martin Act. The firm had reportedly launched the Initial Coin Offering (ICO) of their CSD tokens back in December of 2017. From the ICO, the firm managed to sell a total of 200,000 CSD and generated more than $100,000 in the process.
Throughout the process, the investors were provided with wrong information regarding profiting from the tokens. Coinseed misled the investors into thinking that they would be able to make profits for holding as many CSD tokens as possible.
However, the entire process was illegal as Coinseed had failed to achieve even the first legal phase of the ICO. The Attorney General alleged that Coinseed proceeded with the ICO without even getting the assets registered by the relevant regulators.
Furthermore, Coinseed had made the investors believe that they would only start receiving profits once the smartphone application for the platform has been created and launched. Although the General Business Law required the firm’s securities to be registered by OAG, yet the firm never complied with it.
As far as the CEO and the CFO were concerned, the AG alleged the executives of spreading misinformation. The AG alleged that the executives of spreading wrong information about their fields of expertise and professional backgrounds. On top of that, the executives even provided incorrect and concealed information to investors with respect to trading fees and charges.