SEC Charges Digital Asset Trading Platform and Its CEO with Registration Violations
Litigation Release No. 25032 / February 17, 2021
Securities and Exchange Commission v. Coinseed, Inc. and Delgerdalai Davaasambuu, Civil Action No. 21 Civ. 1381 (S.D.N.Y., filed February 17, 2021)
The Securities and Exchange Commission today announced charges against Coinseed, a company that purported to offer a mobile investment application that enabled users to invest in digital assets, and its co-founder and Chief Executive Officer, Delgerdalai Davaasambuu, in connection with Coinseed's offer and sale of digital asset securities.
According to the SEC's complaint, filed in federal district court in Manhattan, from at least December 2017 to May 2018, Coinseed and Davaasambuu sold digital asset securities called "CSD tokens" to hundreds of investors, including investors based in the US. The complaint alleges that Coinseed and Davaasambuu did not file a registration statement for the offering, and that the offering failed to satisfy any exemption from registration. The complaint further alleges that by failing to file a registration statement, Coinseed denied prospective investors the information required for such an offering to the public. As alleged, through the offering Coinseed raised at least $141,410.
The SEC's complaint charges Coinseed and Davaasambuu with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The SEC seeks permanent injunctive relief, disgorgement plus prejudgment interest, and civil penalties.
The SEC's investigation was conducted by Amy Mayer and Sandeep Satwalekar in the New York Regional Office. The litigation will be led by Mark Sylvester and Ms. Mayer. The case is being supervised by Lara Shalov Mehraban. The SEC appreciates the assistance of the Office of the New York Attorney General.