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New York AG Shuts Down Crypto Exchange On Accusations Of Unlawfully Converting User Funds To Dogecoin

·1 min read

The New York Attorney General has secured a court order to officially shut down crypto exchange Coinseed for charges related to defrauding investors.

What Happened: According to a report from Bloomberg, New York Attorney General Letitia James ordered crypto exchange Coinseed Inc to close down operations and pay $3 million in fines.

Amongst a series of other charges, Coinseed had reportedly been converting its customers' funds into Dogecoin (CRYPTO: DOGE) without their consent.

In June, CoinDesk reported an account of one user who found his crypto portfolio, which was previously spread across a variety of cryptocurrencies, had been converted into Dogecoin overnight.

The user’s portfolio, which was originally worth $48,000, turned into $31,000 in Dogecoin.

Since February, assistant attorneys General Brian Whitehurst and Amita Singh have reported receiving 170 complaints from Coinseed customers claiming their wallet balances had shrunk by tens of thousands of dollars.

The crypto exchange’s run-in with the AG's office dates back to February, when it faced charges for selling unregistered securities worth $1 million to support the growth of its business.

Coinseed CEO Delgerdalai Davaasambuu and former CFO Sukhbat Lkhagvadorj were also named in the lawsuit.

According to assistant attorney Singh, Davaasambuu has been completely radio silent since promising to return investor funds.

Price Action: At press time, DOGE was trading at a price of 23 cents, gaining 1.62% over the last 24 hours.

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