1. BITBILIHome
  2. Article

Cryptocurrency Company Defeated: New York Attorney General Recovers $4.3 Million 

• 33 views

TL;DR Breakdown

  • Coin Cafe, a Brooklyn-based cryptocurrency company, has been ordered to pay $4.3 million in restitution for defrauding investors through undisclosed and exorbitant fees.
  • The investigation by the New York Attorney General’s office revealed Coin Cafe’s deceptive marketing of “free” wallet storage while charging high fees, wiping out investors’ accounts.

New York Attorney General Letitia James has successfully reached a settlement with Coin Cafe, a Brooklyn-based cryptocurrency company, securing $4.3 million in restitution for defrauded investors. The investigation conducted by the Office of the Attorney General (OAG) revealed that Coin Cafe had deceived investors by charging excessive and undisclosed fees for its wallet storage service, despite marketing it as “free” on its website. 

This agreement not only emphasizes the need for increased oversight and regulations in the cryptocurrency industry but also aims to provide full restitution to affected investors. The following article offers a comprehensive overview of the case.

Contents
hide

1
Deceptive Practices Unveiled: Coin Cafe’s Fraudulent Scheme

2
Coin Cafe’s Regulatory Non-Compliance and Violations

3
Legal Actions and Recoveries in the Cryptocurrency Industry

4
Conclusion

Deceptive Practices Unveiled: Coin Cafe’s Fraudulent Scheme

Coin Cafe, a cryptocurrency trading platform, allowed investors to store their Bitcoin in a wallet storage account. However, an investigation conducted by the OAG found that Coin Cafe was charging investors significantly high and undisclosed fees for utilizing their wallet storage service. The company had initially marketed this service as “free” on its website. Consequently, many investors saw their accounts completely depleted due to these excessive fees. 

Shockingly, one New Yorker was charged over $10,000 in fees within a month, while another investor incurred fees amounting to more than $51,000 over a span of 13 months. Coin Cafe had been regularly charging and increasing fees without providing adequate disclosure to investors, as determined by the OAG’s findings.

Coin Cafe’s Regulatory Non-Compliance and Violations

Coin Cafe, as a Brooklyn-based cryptocurrency trading platform, had failed to register with the OAG as a commodity broker-dealer, a legal requirement. Although the company had submitted a BitLicense application to the New York State Department of Financial Services (DFS) in July 2015, it continued its virtual currency operations for seven and a half years while awaiting DFS’s review and approval. 

While BitLicense was eventually granted in January 2023, Coin Cafe was obligated to register with the OAG during that period. The failure to do so not only violated the Martin Act but also put investors at risk. The investigation also discovered that Coin Cafe had made false claims about providing a free account and wallet storage, as it had begun charging storage fees without notifying investors in September 2020. Coin Cafe modified its fee structure four times, each time increasing the charges without clearly informing investors of the changes.

Legal Actions and Recoveries in the Cryptocurrency Industry

Attorney General James and her office have demonstrated a commitment to enforce New York laws within the cryptocurrency industry and protect investors. In recent months, several notable cases have been pursued, resulting in recoveries and legal actions against non-compliant platforms. Lawsuits were filed against CoinEx and KuCoin for their failure to register as commodity broker-dealers, while a multistate coalition recovered $24 million from Nexo for operating illegally. 

Additionally, the former CEO of a crypto company Celsius was sued for defrauding investors and concealing the company’s financial condition. These actions highlight the Attorney General’s dedication to safeguarding investors and combating fraudulent practices within the cryptocurrency industry.

Attorney General James encourages individuals affected by deceptive conduct within the virtual assets market to report these issues to the OAG. Furthermore, workers within the cryptocurrency industry who have witnessed misconduct or fraud are encouraged to file a whistleblower complaint with the Attorney General’s office, even anonymously.

Conclusion

The successful settlement between the New York Attorney General’s office and Coin Cafe marks another significant step toward protecting investors and enhancing regulation within the cryptocurrency industry. Coin Cafe’s deceptive practices, including charging undisclosed fees and operating without proper registration, have highlighted the need for increased oversight. With this settlement, affected investors will receive full restitution, and Coin Cafe will be required to comply with stricter regulations.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

文章来源于互联网:Cryptocurrency Company Defeated: New York Attorney General Recovers $4.3 Million 

Disclaimers:

1. You are solely responsible for your investment decisions and this info is not liable for any losses you may incur.

2. The copyright of this article belongs to the writer, it represents the writer's opinions only, not represents the site's ones. Not financial advice.

Previous 2023年5月20日 07:32
Next 2023年5月20日 08:29

Related articles

  • Nigeria’s president forms committee to reform tax laws and boost revenue generation

    TL;DR Breakdown President Bola Tinubu of Nigeria is reforming tax laws to boost revenue and reduce borrowings. The goal is to increase the tax-to-GDP ratio from 10.9% in 2021 to 18% in three years. These reforms are part of Tinubu’s wider plan to improve the economy, which includes overhauling the power industry and easing foreign-exchange controls. Description Nigeria’s President, Bola Tinubu, is spearheading an ambitious fiscal initiative to revamp the country’s tax regulations and improve revenue efficiency. The leader’s decisive action signifies a concerted effort to wean Africa’s largest crude oil producer off its borrowing dependency while boosting infrastructure, healthcare, and education investments. To enhance revenue transparency and utilization, Tinubu has rallied … Read more Nigeria’s President, Bola Tinubu, is spearheading an ambitious fiscal initiative to revamp the country’s tax regulations and improve revenue efficiency. The leader’s decisive action signifies a concerted effort to wean Africa’s largest crude oil producer off its borrowing dependency while boosting infrastructure, healthcare, and education investments. To enhance revenue transparency and utilization, Tinubu has rallied a top-tier committee led by Taiwo Oyedele, Africa tax leader…

    Article 2023年7月10日

  • HSBC’s H1 net profit more than doubles – What’s next?

    TL;DR Breakdown HSBC’s net profit more than doubled in the first half of 2023, reaching $18.1 billion, driven by strategic decisions and higher net interest income. The bank’s board approved a second interim dividend and a $2 billion share buyback, and the CEO expects to exceed pre-pandemic dividend levels by year’s end. Description The financial world is always on the lookout for a success story, and HSBC’s latest report is nothing short of triumphant. As Europe’s largest bank by assets, HSBC’s net profit soared to a staggering $18.1 billion in the first half of this year, a leap that more than doubled the $9 billion from the same … Read more The financial world is always on the lookout for a success story, and HSBC’s latest report is nothing short of triumphant. As Europe’s largest bank by assets, HSBC’s net profit soared to a staggering $18.1 billion in the first half of this year, a leap that more than doubled the $9 billion from the same period in the previous year. But what’s next for HSBC? The answer is a…

    Article 2023年8月2日

  • Crypto fraudster lands 8-year prison term for UAE scam

    TL;DR Breakdown Nigerian citizen Olalekan Jacob Ponle, a UAE resident, is sentenced to eight years in federal prison for executing a multi-million dollar crypto fraud scheme targeting U.S. businesses. Ponle used a network of scammers to impersonate corporations and trick employees into transferring funds. The stolen money was converted into Bitcoin through a network of “mules.” Profits from the fraud were used to purchase luxury vehicles, including a Rolls Royce Cullinan and a Lamborghini Urus. Description In a landmark legal ruling, a Nigerian citizen and resident of the United Arab Emirates has been sentenced to an eight-year term in a federal prison. The case marked a significant turn in the battle against crypto fraud, revealing the risks and ramifications that lie beneath the lure of the burgeoning digital economy. Olalekan Jacob … Read more In a landmark legal ruling, a Nigerian citizen and resident of the United Arab Emirates has been sentenced to an eight-year term in a federal prison. The case marked a significant turn in the battle against crypto fraud, revealing the risks and ramifications that lie beneath…

    Article 2023年7月20日

  • Elon Musk goes after Twitter acquisition lawyers

    TL;DR Breakdown Elon Musk’s X Corp has filed a lawsuit against law firm Wachtell, Lipton, Rosen & Katz over a $90 million fee charged during Twitter’s acquisition. Musk claims the law firm amended its fee arrangement to gain an “improper bonus payment” and took advantage of a vulnerable corporate client. The fee was paid during a time of tumult when Musk was initially reluctant to close the Twitter deal, leading to a lawsuit from Twitter. Description Silicon Valley’s famed pioneer Elon Musk is taking on Wall Street’s elite in a groundbreaking lawsuit that encapsulates a blend of tech, finance, and legal drama. Musk’s entity, X Corp, which now owns Twitter, is squaring off against one of Wall Street’s most prestigious law firms, Wachtell, Lipton, Rosen & Katz, in a battle over … Read more Silicon Valley’s famed pioneer Elon Musk is taking on Wall Street’s elite in a groundbreaking lawsuit that encapsulates a blend of tech, finance, and legal drama. Musk’s entity, X Corp, which now owns Twitter, is squaring off against one of Wall Street’s most prestigious law firms,…

    Article 2023年7月9日

  • Gary Gensler is about to ruin the American economy

    TL;DR Breakdown Gary Gensler, current chair of the SEC, has introduced an unprecedented number of regulations, more than any chair since the 2008 financial crisis. Only 17% of Gensler’s regulations stem from congressional directives, unlike his predecessors. Description The pathway to economic stability in America is an intricate dance between free market dynamics and regulatory oversight. Often, it’s a delicate balance. Gary Gensler, the current chair of the US Securities and Exchange Commission (SEC), seems determined to upset this balance, if his recent spate of regulations is any indicator. The Avalanche of Regulations … Read more The pathway to economic stability in America is an intricate dance between free market dynamics and regulatory oversight. Often, it’s a delicate balance. Gary Gensler, the current chair of the US Securities and Exchange Commission (SEC), seems determined to upset this balance, if his recent spate of regulations is any indicator. The Avalanche of Regulations Gensler’s tenure has witnessed a bombardment of regulations unseen since the aftermath of the 2008 global financial crisis. During his first 850 days, which culminated on August 15th, Gensler…

    Article 2023年9月2日
TOP