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Coinseed faces state and federal charges over investing app

On Behalf of | Feb 19, 2021 | White Collar Crimes

If you run a business and are accused of committing fraud, it is important that you have the opportunity to defend yourself. Not doing so can lead to serious fines and penalties that could have a lasting impact on your future.

One issue that is being seen more often recently is investigations into fraud committed through apps. For example, the automated crypto-investing app Coinseed Inc. is currently facing fraud charges in New York. 

The basics of the Coinseed debacle

The Feb. 17 report states that the app-based investment service cost its investors upwards of $1 million by making false claims, charging hidden fees and other irregularities and failures. Coinseed Inc. now faces allegations of defrauding people who had downloaded the app and breaking the registration laws that should have prevented this issue.

The New York Attorney General charged Coinseed claiming that it did not have a BitLicense or any federal clearance for its investment app. As a result, the app was running an unregulated commodities and securities trading shop. The NY Attorney General is seeking to shut down the company’s app and to ban its executives from taking part in future investment plays. Additionally, the state is looking to recover compensation for victims of the company should it win the lawsuit.

The company faces another related lawsuit by the U.S. Securities and Exchange Commission, or SEC. That case is federal, while the other will be held at the state level.

Fraud can lead to both federal and state cases

If you are accused of fraud, know that you could end up facing charges in both state and federal courts. It’s vital to have a strong defense on your side, so you can protect yourself against those allegations and avoid lasting damage to your reputation and future. Many times, inexperience and mistakes are at the root of these cases, rather than any real intent to break the law. Speak with a criminal defense attorney right away if you’re concerned about charges.