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Coinseed Secretly Switches to Dogecoin

Users claim that Coinseed discreetly switched user accounts to Dogecoin.

Switching funds to Dogecoin was a good thing before, but now it is emptying the savings of the people.

Customers of Coinseed say that the company converted their deposits to Dogecoin without their consent and withdrawals can’t be processed. Unable to reach the firm, the users just witnessed the crashing of Dogecoin wipe out their funds.

“This entire thing has made me pretty sick,” said Ace201613 on r/CoinseedSCAM, a subreddit used to express their anger and to get a response. In its Facebook group, two customers report losses of more than $100,000 and a lot for lower amounts. Raged, at least 50 customers expressed concern in a lawsuit against Coinseed. Anyone from Coinseed has responded yet.

Charges Against Coinseed

Last February, the US SEC and New York Attorney General filed charges against Coinseed for tricking investors into buying a token and falsifying about its executives. The NYAG stated that Coinseed took $1 million from investors in a sale of tokens. Ever since the filings, Coinseed’s social media feeds are inactive, and its app is not on app stores any longer.

Complaints about the conversions to other cryptocurrencies have started coming to the NYAG since April 16, and legal documents filed by the Coinseed’s counsel have been seen.

Lawyers of Coinseed wanted to get out of the cases. Last week, Morrison Cohen stated that Coinseed’s founders have not responded yet, putting off “important decisions” about the other cases. Morrison said that he wanted to cut ties with Coinseed last April 21. 

“It is clear that the attorney-client relationship has broken down irreparably,”

Jason Gottlieb, a partner for Morrison Cohen.

Coinseed’s app allowed the customers to invest their change in cryptocurrencies. Customers can set aside their money to one of the 17 cryptocurrencies or lending protocols, then Coinseed was to take care of the investments.

“We are looking to build a bridge for the masses to adopt crypto in the most seamless way,”

Coinseed stated in an SEC filing.

It seemed to be successful at first, for a lot of customers on the r/CoinseedSCAM reported a lot of surges in their portfolios. However, their accounts meant nothing if they can’t withdraw the proceeds.

Coinseed has had a $92,537 debt since March 2019, according to the SEC.

Coinseed’s CEO and CFO in hiding

In 2017, the firm was founded by two Mongolians who studied in New York. CEO Delgerdalai Davaasambu, wrote the code and is holding the company’s 80% shares. And CFO Sukhbat Lkhagvadorj, handled the finances and is holding the 20% of the shares. In filings with the SEC, Coinseed stated that Lhagvadorj formerly worked at “multiple Wall St. firms including a fixed income broker-dealer and an economic consulting firm focusing on analyzing securities.”

But the NYAG stated that Lkhagvadork “had never traded securities or commodities.”

Neither one of them can be reached for a response. And Morrison Cohen believes that Davaasambu went back to Mongolia. The lawyers stated that there was no available forward address.

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