One of the most important things about the crypto industry, as well as the world of finance in general, is that of consent. When any financial institution becomes involved in an activity that uses its clients’ funds without the users’ knowledge or consent, it is grounds for fraudulent behavior. This is precisely what had transpired when cryptocurrency exchange Coinseed was mandated to reportedly shut down its operations after it was revealed that Coinseed was, in fact, converting its clients’ funds to Dogecoin (DOGE) without being given the consent to do so, thereby doing it behind the backs of the customers.
This ultimately led to Letitia James, the New York Attorney General, ordering the exchange to stop all of its operations and activities. This shutdown order had been given following numerous complaints from the exchange’s clients that the aforementioned funds were covertly converted into DOGE despite the fact that the exchange never bothered to ask permission to perform this action.
NYAG wins, Coinseed loses
After several complaints, Coinseed finally conceded to the NYAG (New York Attorney General) after the latter secured a victory in the case against the cryptocurrency exchange. No longer shall the exchange’s clients be subject to its shady dealings and the defrauding of its users.
The order had come yesterday, on the 13th of September 2021, when Letitia James had instructed Coinseed to stop all of its operations in addition to paying fines worth $3 million after it was also revealed that the exchange had reportedly frozen its customers’ ability to carry out withdrawals, as well as of course converting the funds into DOGE behind everyone’s backs. Moreover, the crypto exchange had also apparently issued unlicensed securities and emptied out its respective bank accounts.
‘Coinseed involved in numerous fraudulent activities’
Coinseed had actually been ordered to shut down its operations in the past, yet despite this, it still decided to participate in ‘fraudulent and egregious’ activities even though the case was still very much ongoing. As a result, it had been declared that the exchange was conducting its operations unethically and illegally, with it going so far as to hold the clients’ funds hostage.
In related news, Delgerdalai Davaasambufor, the founder of Coinseed, had been sued on the grounds of him defrauding countless investors and traders out of over $1 million. The United States SEC had also accused Coinseed of spreading misinformation and trading commodities despite not being registered. Delgerdalai had mentioned in the past that the funds should be returned, but he has since been ‘radio silent’ regarding all of the allegations.