On February 17, 2021, Coinseed, a crypto investment platform, was sued by the New York State for allegedly defrauding investors over $1 million. 

The complaint alleges that Coinseed failed to register as a commodity broker dealer. Further, the complaint states Coinseed violated the New York’s Martin Act by selling its own unregistered digital tokens to fund its trading platform.

According to the complaint, the Coinseed Executives, CEO Delgerdalai Davaasambuu and former CFO Sukhbat Lkhagvadorj are facing charges for misleading clients about their professional background and lack of transparency in charging trading fees to clients.

The New York State is seeking investor reimbursement, with permanent shut down of Coinseed operations and prohibiting its executives from future dealing with securities and commodities. The matter was investigated in parallel by the U.S. Securities and Exchange Commission (SEC).