New York Attorney General receives complaint of illegal conversion of customer’s cryptocuurencies by Coinseed

New York Attorney General receives complaint of illegal conversion of customer's cryptocuurencies

Based on the Coinseed conversion of customers account to Dogecoin, there have been plethora of complaints by the customers of Coinseed to the Attorney General of New York.

However, the counsel to Coinseed, in the person of Morrison Cohen, in a declaration, posited  that Coinseed founders are yet to respond to his communication, which is causing a huge gap in making pertinent decisions.

Also, Morrison Cohen posited that Attorney-Client relationship has broken down irretrievably and thereby there is likelihhod of cutting ties with Coinseed. The aforementioned was made by Jason Gottlieb, a partner to Coinseed.

Coinseed’s app had allowed customers to invest their spare change in cryptocurrencies. Customers could allocate their money to any of 17 cryptocurrencies or crypto lending protocols, and Coinseed was supposed to handle the investments. “We are looking to build a bridge for the masses to adopt crypto in the most seamless way,” it said in an earlier SEC filing.

It seemed to be a successful model; several customers on the r/CoinseedSCAM site reported tenfold increases to their portfolios. But the balance in their accounts ultimately means nothing if the proceeds can’t be withdrawn.

According to a 2019 annual report filed with the SEC, Coinseed was $92,537 in debt by March of that year.

The firm was founded in 2017 by two Mongolians who studied in New York: CEO Delgerdalai Davaasambu, who wrote the code and holds 80% of the shares in the company, and CFO Sukhbat Lkhagvadorj, who handled the finances and holds the other 20%. In SEC filings, Coinseed said that Lkhagvadorj has worked at “multiple Wall St. firms including a fixed income broker-dealer and an economic consulting firm focusing on analyzing securities.”

However, the NY attorney general said that Lkhagvadorj “had never traded securities or commodities.”

 

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