New York Attorney General Letitia James has accused cryptocurrency trading platform Coinseed Inc.of continuing to defraud investors by moving all of its clients’ assets into the meme cryptocurrency Dogecoin(DOGE) without their permission or knowledge.
What Happened: The State AGhasfiled a court motionto immediately halt the operations of Coinseed, alleging continued fraud and citing new evidence.
James had previously filed a lawsuit in February against Coinseed and its two top executives for defrauding investors out of more than $1 million through undisclosed fees and the sale of worthless CSD tokens, which were Coinseed’s own cryptocurrency.
As per the latest court filing on May 6, which was first seen byBloomberg, Coinseed converted all investor assets intoBitcoin(BTC) on April 16 without informing them. The cryptocurrency trading platform also disabled all functionality in the application so that investors would not be able to withdraw their money.
Later in the day, Coinseed traded the bitcoins for an “extremely volatile virtual currency” named Dogecoin, which was experiencing a sharp selloff at that time, the filing alleges.
James noted that in the nearly three months since she filed the lawsuit in February, her office has received over 130 complaints from investors regarding Coinseed’s fraudulent conduct.
Why It Matters:Dogecoin, which emerged in 2013 as a joke, has shot to prominence this year partly due to celebrity endorsements from the likes of Tesla Inc. (NASDAQ:TSLA) CEO Elon Musk and Dallas Mavericks owner Mark Cuban.
The Siba Inu-themed cryptocurrency is up almost 70% since mid-April and its year-to-date gains are an impressive 10,442.19%. Bitcoin’s year-to-date gains, in comparison, are only 95%.
Dogecoin has risen 8.7% in the past 24 hours and is trading at $0.4961 at press time. It has now emerged as the fourth most valuable cryptocurrency.
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