NY AG sues to shut down crypto app Coinseed alleging it sells a worthless currency and defrauded investors

NY AG sues to shut down crypto app Coinseed alleging it sells a worthless currency and defrauded investors

New York Attorney General Letitia James announced on Wednesday her office has sued to shut down Coinseed, a cryptocurrency-trading app that prosecutors allege ignored securities laws and defrauded thousands of investors. 

The lawsuit alleges that Coinseed and its two top executives, CEO Delgerdalai Davaasambuu and CFO Sukhbat Lkhagvadorj, "were unlawfully trading cryptocurrencies, like Bitcoin, without being a registered broker-dealer in New York," according to a Wednesday press release.

James said in the filing that Coinseed sold its own cryptocurrency, the CSD token, to fund its trading platform, but that the company wasn't registered legally to do so. That rendered the currency "worthless," James' office said. 

In soliciting investors for their initial coin offering “” the equivalent of an initial public offering but for digital currency “” Coinseed's two top executives lied about their professional experience, James said. Despite having "little financial services experience," Lkhagvadorj "misrepresented himself as a former Wall Street trader," according to the filing. 

The lawsuit also alleges that Coinseed added on extra undisclosed fees to trades, while advertising itself as a low-fee platform. 

Davaasambuu told Insider he denies the allegations and takes issue with several of the attorney general's charges. He said Coinseed left New York in 2019 and has not accepted