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NYAG investigator falls for misleading claims made by crypto trading platform

Press Releases Crypto News AMB-Crypto NYAG investigator falls for misleading claims made by crypto trading platform

The crypto trading platform, Coin Cafe, comes under the NYAG’s radar for making misleading claims
An investigator belonging to the AG’s office was caught in the scheme

The US New York Attorney General (NYAG) – Letitia James – announced that a crypto entity would be paying restitution to investors for making misleading claims. The entity in highlight is Coin Cafe – a crypto trading platform – based in Brooklyn. According to a press release, the NYA has secured $4.3 million from the crypto firm for “defrauding investors”.

The NYAG has been quite active in the crypto space lately. The regulator was the first one in the United States to declare Ethereum (ETH) as a security. Attorney James reached this conclusion based on the four prongs of the Howey Test. Since then, the Chairman US Securities and Exchange Commission (SEC) – Gary Gensler – has refused to speak about ETH’s status in the securities market.

The Attorney General’s office claimed that the crypto platform charged “exorbitant and undisclosed fees” from investors for its wallet service. This move comes despite the platform advertising itself as a free platform for wallet storage. The press release said,

“These fees to store Bitcoin were so high that they wiped out investors’ accounts entirely. Coin Cafe charged one New Yorker over $10,000 in one month and another investor more than $51,000 in fees over the course of 13 months.”

Crypto trading platform caught misleading investors

Following an investigation by the NYAG, the crypto trading platform accepted that it did increase its fees and charged investors regularly without notifying them. This has, finally, resulted in the firm agreeing to pay restitution to all the investors who had to pay fees without prior knowledge about the system.

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Author: Priya NV

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