{"id":49993,"date":"2023-05-19T06:38:06","date_gmt":"2023-05-19T10:38:06","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=49993"},"modified":"2023-05-19T06:38:10","modified_gmt":"2023-05-19T10:38:10","slug":"coin-cafe-settles-with-ny-ag-for-4-3m","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/coin-cafe-settles-with-ny-ag-for-4-3m\/","title":{"rendered":"Coin Cafe Settles with NY AG For $4.3M"},"content":{"rendered":"\n

The New York Attorney General \r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>has reached a settlement with a Brooklyn-based crypto company for charging customers excessive and undisclosed fees.<\/p>\n\n\n\n
\"Coin<\/figure>\n\n\n\n

Coin Cafe<\/use><\/svg><\/span><\/a>, a cryptocurrency trading platform that offered Bitcoin wallet storage,<\/a> has agreed to pay $4.3 million to the Office of the New York Attorney General (OAG) for defrauding its investors. <\/p>\n\n\n\n

The OAG found that the company charged excessively high fees to its users without adequately informing them. The company advertised its wallet service as free but paid its New York residents tens of thousands of dollars. <\/p>\n\n\n\n

Due to these fees, the agency discovered that certain user account balances were utterly depleted.<\/p>\n\n\n\n

Coin Cafe modified its fee structure four times<\/h2>\n\n\n\n

The OAG's investigation revealed that Coin Cafe claimed to provide its investors with a free account and free wallet storage but, in reality, Coin Cafe started charging storage fees for its wallet service beginning in September 2020 without informing investors. <\/p>\n\n\n\n

These Bitcoin storage fees were so high that they completely wiped out investors' accounts. One New Yorker was charged over $10,000 monthly fees, while another investor was charged over $51,000 for 13 months.<\/p>\n\n\n\n

Coin Cafe changed its fee structure four times, and in October 2022, it introduced an exorbitant fee increase. The company began to charge users more than 7.99% or $99 per month if they did not transact crypto within 30 days.<\/p>\n\n\n\n

Coin Cafe's Attempt to Violated the Law<\/h3>\n\n\n\n

Coin Cafe failed to register with OAG as a commodity broker-dealer, as the law requires in Brooklyn. In July 2015, Coin Cafe filed an application with the New York State Department of Financial Services (DFS) for BitLicense<\/a>, a virtual currency license. <\/p>\n\n\n\n

DFS reviewed and evaluated Coin Cafe's BitLicense application while allowing the company to continue its virtual currency business for seven and a half years.<\/p>\n\n\n\n

The DFS authorized Coin Cafe's BitLicense in January 2023. However, under New York law, broker-dealers with a valid BitLicense or a pending BitLicense application are still obligated to register with OAG. <\/p>\n\n\n\n

Failing to register with OAG violates the Martin Act<\/use><\/svg><\/span><\/a> and puts investors at risk.<\/p>\n\n\n\n

Coin Cafe to compensate investors and Cap fees<\/h4>\n\n\n\n

As a result of the settlement reached today, Coin Cafe will pay restitution<\/use><\/svg><\/span><\/a> to all misled investors, including more than $508,000, to more than 340 New York investors who were charged fees without their knowledge. <\/p>\n\n\n\n

The company will continue to operate but must limit its monthly payments to 0.002% and adequately inform its users of all fees.<\/p>\n\n\n\n

Letitia James, the New York Attorney General, criticized Coin Cafe's practices and stated, “The cryptocurrency industry needs better regulation,” highlighting this case as another example.<\/p>\n\n\n\n

This announcement also mentioned James' recently proposed<\/use><\/svg><\/span><\/a> crypto-specific regulation, which could lead to additional enforcement.<\/p>\n\n\n\n

\n

Cryptocurrency company @coincafeinc<\/use><\/svg><\/span><\/a> deceived investors out of millions.

We investigated Coin Cafe, and now we're making the company pay $4.3 million that will go back to the people it tricked.

Crypto companies must play by the same rules as everyone else.<\/p>— NY AG James (@NewYorkStateAG) May 18, 2023<\/use><\/svg><\/span><\/a><\/blockquote>

The New York Attorney General has reached a settlement with a Brooklyn-based crypto company for charging customers excessive and undisclosed fees. Coin Cafe, a cryptocurrency trading platform that offered Bitcoin wallet storage, has agreed to pay $4.3 million to the Office of the New York Attorney General (OAG) for defrauding its investors. The OAG found […]<\/p>\n","protected":false},"author":44,"featured_media":50015,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32],"tags":[14517,132,5153],"class_list":["post-49993","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-exchange-news","tag-coin-cafe","tag-crypto","tag-nyag"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/05\/ny-ag-letitia-james.jpg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/49993","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=49993"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/49993\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/50015"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=49993"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=49993"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=49993"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}