Home > Law Enforcement > NY Attorney General Seeks to Shut Down Cryptocurrency Trading Platform

NY Attorney General Seeks to Shut Down Cryptocurrency Trading Platform

Coinseed is accused of ‘depleting accounts,’ and transferring funds to an offshore, unregulated platform.

By Michael Katz


New York Attorney General Letitia James has filed for a temporary restraining order, a preliminary injunction, and the appointment of a receiver to stop what she said are the “continued illegal and fraudulent operations” of cryptocurrency trading platform Coinseed.

In February, James filed a lawsuit against Coinseed, its CEO and founder Delgerdalai Davaasambuu, and its CFO Sukhbat Lkhagvadorj alleging fraud.

However, the New York Attorney General’s office says the company and its leaders have continued their fraud and that there has been new fraudulent conduct since the suit was filed. It said its request is necessary to immediately block any additional unauthorized trades.

“Three months ago, we filed this case against Coinseed and its executives alleging that they violated New York state laws and illegally squandered investors’ monies,” James said in a statement. “However, in the months since we filed our suit, the greed perpetrated by Coinseed and its CEO has not only continued, but grown.”

She added that Coinseed “continued to operate illegally—holding investors’ funds hostage and conducting unauthorized trades in investors’ portfolios, while depleting accounts and transferring virtual currency to an offshore, unregulated trading platform.”

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James said that, since February, her office has received more than 130 complaints from investors who are worried they’ll lose their assets. She said investors who had portfolios worth more than $150,000 are now unable to withdraw those funds.

The complaint also alleged that Coinseed moved every investors’ holdings into the volatile Dogecoin cryptocurrency without their authorization. Additionally, investors have complained that their ability to trade in their accounts, withdraw their funds, or otherwise avoid further losses has been completely cut off.

The lawsuit alleges Coinseed defrauded thousands of investors out of more than $1 million and that the firm and its executives were unlawfully trading cryptocurrencies such as Bitcoin without being a registered broker/dealer (B/D) in New York, while at the same time not disclosing certain fees.

“For over three years, Coinseed and its executives flagrantly and illegally violated New York state laws,” James said when the lawsuit was filed in New York County State Supreme Court.

The suit accuses the company of seeking to finance its operation by raising funds in an unregistered securities offering and luring in investors with false claims about the executives’ professional experiences and the role of their management team. It also alleges Coinseed scammed investors into purchasing their token by violating New York laws requiring complete and truthful disclosures.

Additionally, Coinseed is accused of advertising low fees for its mobile application trading platform while adding an undisclosed markup to the quoted price to extract additional fees from investors. Coinseed was also charged with conducting an unregistered securities offering in the form of an initial coin offering (ICO) and for not registering to trade cryptocurrency within or from New York state.

James is seeking restitution for the allegedly defrauded investors, disgorgement of already raised funds with interest, permanent injunctions against all defendants, and an officer-and-director bar against Davaasambuu and Lkhagvadorj, as well as a bar prohibiting Coinseed from participating in any future securities offerings or as commodities broker/dealers.

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Home > News > Market Moves > The Case for Why China Is a Good Investing Destination
Market Moves

The Case for Why China Is a Good Investing Destination

At our symposium, the president of its largest fund manager sketched out that nation’s advantages.
By Larry Light


A China dedicated to expanding its consumer economy and offering fertile areas for investors, while preventing GameStop-like debacles from happening—those were the economic and financial tenets laid out by the president of that nation’s largest fund manager.

“We are committed to our goals,” as envisioned in Beijing’s 14th five-year plan, released in 2020, said Sau Kwan, president of E Fund Management. Speaking at our 2021 Virtual Chief Investment Officer Symposium, she outlined the official Chinese objectives of boosting the country’s consumer economy.

By 2025, China will be the world’s largest consuming nation, she vowed, supplanting the United States. She pointed to the traditional Chinese preference for saving, and said the policy was “to encourage people to spend more.”

China has for decades been an exporting powerhouse, which is how it became the world’s second largest economy. Last year, consumer economic activity composed almost 55% of its gross domestic product (GDP), although that was down from 2019 due to the pandemic, according to Chinese authorities.

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The inflation rate, 2.4% last year, will reach 3.1% by 2021’s year-end, Kwan predicted. “That’s in a healthy, acceptable range,” she said.

Kwan applauded her country’s recovery from the pandemic’s economic harm. “After the quarantines and lockdowns, the rebound is amazing,” she said. “E-commerce is up 30%. We’ll continue to do well.”

For institutional investors, good areas to invest in are tech (particularly chips), manufacturing, and investment banking, Kwan said. A laudable aspect of the Chinese stock market is that 70% to 80% are retail investors, she added. But, thankfully, she contended, messes like that surrounding US retailer GameStop in the winter—whose price soared, then crashed, in a war on short sellers—can’t occur in China because of constraints on short positions.

Kwan also said China was well on its way to becoming carbon neutral, in compliance with the 2015 Paris Accords. Fossil fuel consumption in China will peak in 2030 and disappear by 2060, she stated.

Her firm has more than $350 billion in assets under management (AUM). More than 60% of E Fund’s assets are from institutional investors, including China’s National Social Security Fund, central banks, pensions funds, endowments, and foundations.

In China, she said, there are more women in finance than in the US. “Our country has embraced equality,” she declared, and has been doing so since 1949—which is when mainland China fell to the communists. “Half of E Fund is female,” she said. “Our office is gender neutral, but you have to deliver.”

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