The Office of New York Attorney General Letitia James ("OAG") filed a motion for a temporary restraining order ("TRO") against digital asset company, Coinseed, Inc. and its senior officers "to immediately halt the continued illegal and fraudulent operations of the cryptocurrency trading platform." The motion also seeks a preliminary injunction and the appointment of a receiver. The SEC and OAG previously charged the company and its CEO with executing an unregistered securities offering.
In its Memorandum in Support for the Motion, the OAG stated that since the February 2021 filing of the OAG Complaint, and action by the SEC, the company continued to engage in fraud by disabling investor withdrawals and making unauthorized trades in investors' accounts, including one that involved the trade of Bitcoins in all investor accounts for the "extremely volatile" virtual currency Dogecoin. Additionally, the OAG alleged that the company (i) drained its corporate bank account, (ii) converted most of its U.S. dollars into Bitcoin and (iii) moved all remaining virtual currency to a foreign, unregulated virtual currency trading platform.
The OAG argued that the Court should order preliminary relief under New York's Martin Act ("Fraudulent Practices in Respect to Stocks, Bonds and Other Securities") and Executive Law Section 63(12).
Primary Sources
- NYAG Press Release: Attorney General James Seeks Court Order Immediately Halting Continued Fraud by Illegal Virtual Currency Trading Platform
- NYAG Order: Coinseed, Inc., Delgerdalai Davaasambuu, and Sukhbat Lkhagvadorj
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