(Bloomberg) -- New York authorities won a court order shuttering a tiny cryptocurrency trading platform the state accused of illegally selling securities and improperly acting as a broker-dealer before sinking all its investors' funds into Dogecoin.
The order against Coinseed Inc. and founder Delgerdalai Davaasambuu “permanently halts their illegal and fraudulent operations,” New York Attorney General Letitia James said Monday in a statement. A permanent receiver will also be appointed to protect investors' funds and take control of the platform's website, James said.
James sued Coinseed in February, alleging violations of New York's powerful Martin Act. The court order, which includes a $3 million judgment against the defendants, was issued Sept. 9 by New York State Supreme Court Justice Andrew Borrok, court records show.
Coinseed's lawyer, Jason Gottlieb, didn't immediately respond to a phone call seeking comment.
The platform “moved every investor's holdings into one single, extremely volatile virtual currency (named Dogecoin) which rises and falls dramatically in price in a matter of hours on any given day,” and did it behind its customers' backs, James said in a May court filing.
Read More: Crypto Fraudsters Made a Big Bet on Dogecoin, New York Claims
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