Coinseed founder Delgerdalai Davaasambuu announced the shutdown this week, blaming all his firm’s woes on New York Attorney General Letitia James.
Never forget that Tether used to tell you that it was 100% backed by U.S. currency, and it was only after an New York Attorney General investigation forced its hand that it ever admitted this wasn’t the case.
The New York Attorney General’s Office is accusing digital currency trading startup Coinseed of allegedly selling worthless tokens to investors.
Tether is becoming an artisan at promising to provide an audit showing that its stablecoin is fully backed and then doing everything in its power to avoid exactly that.
In an alert aimed at New York investors, Attorney General James described the “extreme risk” of investing in digital currencies, made all the more relevant by the recent surge in prices.
The NYAG statement is highly critical of Bitfinex and Tether, accusing them of “recklessly and unlawfully [covering up] massive financial losses” and “illegally trading virtual currencies in the state of New York.”
The firm, which operates a mobile application allowing users to trade digital currencies, sold its CSD tokens to investors, according to federal authorities.
The loan was taken to cover for the loss of $850 million in co-mingled client and corporate funds caused by entrusting its liquidity to a Panamanian company called Crypto Capital, according to NYAG.
The outcome of the case could have a huge impact on digital asset markets, with Tether regarded as the asset that backs up much of BTC's (and other popular assets) price.
New York Attorney General Letitia James has requested a New York court to extend the deadline for documents submission by iFinex Inc., the parent company of Bitfinex and Tether.
A court in New York has rejected a petition from the New York Attorney General that would compel Bitfinex and Tether to submit all documents relating to the ongoing investigations.