New York Judge May Require Embattled Trading App Coinseed to Halt Operations

Andrew Borrok appointed a receiver for the embattled automated trading app.

A New York state supreme court judge named a receiver for the unregistered automated trading app Coinseed and may require it to cease operating after claims that it had eliminated customers’ access to their accounts and reduced the value of their holdings.

Judge Andrew Borrok appointed Michelle Gitlitz as the embattled company's receiver. Gitlitz is global head of blockchain and digital assets at the Crowell & Moring and a partner at the Washington D.C. based-firm.

In Borrok's order, Gitlitz cannot hire outside counsel, accountants, appraisers or other service providers without the court's permission.

Last month, New York state Attorney General Letitia James moved to shut down Coinseed for allegedly continuing to defraud its users even as the company faced pressure on multiple legal fronts.

James filed a court motion on May 6 to freeze Coinseed’s trading activity and halt all operations.

In February, James accused Coinseed of bilking $1 million from investors through hidden fees, false claims and a flopped token. The U.S. Securities and Exchange Commission (SEC) hit Coinseed with token registration violations in a parallel suit.