New York Sues To Shut Down 'Fraudulent' Coinseed Crypto Platform (reuters.com) 24
New York's attorney general filed a lawsuit on Wednesday to shut down the cryptocurrency platform Coinseed for allegedly defrauding thousands of investors, including by charging hidden trading fees and selling "worthless" digital tokens. From a report: Attorney General Letitia James said Coinseed traded cryptocurrencies such as bitcoin without registering as a broker-dealer, and sold "CSD" tokens without authorization to raise money for its mobile application startup. James also sued Coinseed Chief Executive Delgerdalai Davaasambuu and former Chief Financial Officer Sukhbat Lkhagvadorj, saying they overstated the midtown Manhattan-based company's management experience, while Lkhagvadorj misrepresented himself as a former Wall Street trader. Coinseed's fraud totaled more than $1 million, according to James, who is also seeking restitution for investors. The U.S. Securities and Exchange Commission filed a related lawsuit against Coinseed and Davaasambuu over the tokens, which both regulators said were sold from December 2017 to May 2018.
fahrenheit (Score:1)
why don't they shut down fahrenheit?
Too soon? (Score:3)
Re: (Score:2)
They did! All it took was deregulation to shut down the power grid and kill dozens of people. I guess it's true that all that has to happen for evil to prevail is for good people to do nothing. Or, you know, for bad people to do nothing, and to enable others to do nothing.
Re: (Score:2)
The rest of the metric world would be grateful if they did.
Not "Worthless" (Score:4, Interesting)
The very definition of worth is how much somebody is willing to pay for an asset, beit real estate, art, gold bars or pretend currency. They paid a million bucks for cryptocurrency therefore it is worth a million bucks.
Re:Not "Worthless" (Score:4, Insightful)
That is only true if there is no mis-representation. A lead coin with a gold leaf wrapper isn't worth $1700 even if someone paid that much if the reason they paid that much is that the seller represented it as solid gold.
Re: (Score:2)
I disagree. A lead coin with a gold leaf wrapper is worth $1700 as long as the person buying it believes it is worth $1700. Commerce is based on faith, regardless of underlying true value (if any). For example, if everybody woke up tomorrow and decided not to buy bitcoin ever again, its value would drop from $50,000 to $0.
Re: (Score:2)
I disagree. A lead coin with a gold leaf wrapper is worth $1700 as long as the person buying it believes it is worth $1700.
No. It's only worth $1700 if the next person will buy it for $1700. It's value isn't based on what you paid for it, but rather on what others would pay you for it.
Re: (Score:2)
I disagree. A lead coin with a gold leaf wrapper is worth $1700 as long as the person buying it believes it is worth $1700.
What people think it's worth vs. the true worth is the important distinction here - given this isn't a private sale between two individuals, but rather between individuals and an entity that, under the law, should have been registered, and that also charges fees for transactions, that distinction becomes even more important.
Re: (Score:2)
Some claim Apple doesn't profit from its App Store
Apple claims it doesn't profit in general. They even invented an elaborate tax avoidance scheme so they could make the claim.
Re: (Score:3)
A lead coin with a gold leaf wrapper is worth $1700 as long as the person buying it believes it is worth $1700.
No, not it is not. It is only worth $1700 if the next person will believe it's worth $1700. And if you have to engage in fraud to make them believe it, then it's not actually worth that. That's what fraud is.
Re: (Score:2)
If the buyer files a civil suit, the court will at least reverse the transaction, making the amended value of the fake gold coin zero.
Re: (Score:3)
You are right, but intrinsically, they are worthless. Gold has industrial uses and you can make jewelery out of it, art can be hung on a wall and admired, even tulips can be put in a vase to make your home look pretty. Crypto has no use whatsoever outside of being a speculative asset.
Cryptards will always parrot something like 'hurr, but the USD is worthless' but they are wrong, it is representative of and backed by the entire economy of the USA and its monetary policy.
Re: (Score:1)
art can be hung on a wall and admired
If art has value, thanks to NFT, I guess crypto has now value by your definition (a lot of art can't be hung).
Re: (Score:2)
Well soon you can buy a car with crypto so...
That's now quite true (Score:4, Insightful)
Crypto gets away with it because a) it hasn't really be regulated yet and b) you can sort of pretend your buying the equivalent to a gift certificate.
Where these guys seem to have run into a problem is they didn't just let people mine and trade, they mined their coins themselves and sold them to fund their business. That's basically selling stock (legally speaking) and there are all sorts of laws about it.
You can often get away with breaking the law by adding "it's X but on the internet" to it (re: Uber) but you absolutely cannot do that with investors. That's because investors are often very, very rich and they've bought all sorts of laws and paid for them to be enforced.
"Not" quite true (Score:2)
Re: (Score:1)
The very definition of worth is how much somebody is willing to pay for an asset
Zeroes and ones that don't back anything other than zeroes and ones... do not qualify as assets.
Re: (Score:2)
ok boomer
Insufficient startup investment (Score:2)
They could have bought more time with a less conspicuous deepfake CEO, with a name selected to borrow vowels from the human CEO and consonants from the CFO.