New York Attorney General Eric Schneiderman ordered two cryptocurrency lending companies to suspend operations on Monday, while three additional platforms were ordered to release information about their operations.
A court order demanding the closure of cryptocurrency exchange Coinseed was obtained by New York Attorney General Letitia James only a few weeks before the decision.
Tipped on unauthorized selling of securities
A partial transcript of a letter from Attorney General Jeff Sessions Monday stated that the Office of the Attorney General has “information that securities and/or commodities were being sold or offered for sale in violation of the law.”
To combat escalating tensions between the cryptocurrency business and regulators around the globe, crypto authorities in the United States have increased their monitoring of a global industry that has so far operated in a regulatory gray area.
Coinseed accused of defrauding thousands of investors
In February, James filed a complaint against Coinseed, accusing the company of scamming thousands of investors, including by charging concealed trading fees and offering “worthless” digital tokens. Coinseed has denied the allegations.
The state’s attorney general warned cryptocurrency investors that they were taking a “extreme danger” by investing in the digital currency, and he also issued cautions to those who facilitate virtual currency trade.
According to James, “Cryptocurrency platforms must follow the law, just like everyone else, which is why we are today ordering the shutdown of two crypto firms and ordering three more to respond to questions promptly.”
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