Bitcoin Daily: Crypto Platform Coinseed Sued For Defrauding Investors; Coinbase Adds Former Stripe Exec To Team

New York’s attorney general sued crypto platform Coinseed Wednesday (Feb. 17), accusing it of defrauding thousands of investors out of over $1 million, Reuters reported.

New York Attorney General Letitia James also alleged that Coinseed sold its tokens without being authorized to raise money for its app and traded cryptocurrencies without a registered broker-dealer license, according to the report.

James also sued Coinseed’s CEO, Delgerdalai Davaasambuu, and its former chief financial officer, Sukhbat Lkhagvadorj, for misrepresenting their experience, Reuters reported.

The U.S. Securities and Exchange Commission (SEC) similarly sued Coinseed over selling its tokens without authorization from December 2017 to May 2018, according to the report.

“I’m 100 percent sure that the suit is full of false accusations,” Davaasambuu told Reuters in an email, referring to James’ lawsuit. “It’s very strange that they’re blaming the very nature of how a startup works.”

In other news, Coinbase has hired Melissa Straight, Stripe’s former global head of Financial Crimes, to lead the crypto exchange’s compliance goals, including know your customer (KYC) and anti-money laundering initiatives, according to a Coinbase company blog post.

Straight also previously led Stripe’s compliance efforts, and before that, oversaw Square’s compliance programs, the post stated.

“As Coinbase continues to be the bridge between the cryptoeconomy and the traditional financial system, implementing industry-leading compliance programs will be critical to earning and maintaining the trust of our retail and institutional customers,” Paul Grewal, chief legal officer of Coinbase, said in the post.

Meanwhile, Blockchain.com raised $120 million in a strategic funding round, the company announced in a blog post Thursday (Feb. 17).

The funding comes at a time when cryptocurrency is becoming increasingly adopted in the mainstream. While Blockchain.com’s crypto wallet is the core of its business, its institutional business has grown, according to the post, and is “significant enough to cover the entire operating cost of the business globally while also delivering additional operating profits.”

Investors of the funding round include Google Ventures, Lightspeed Venture Partners and Lakestar, among others, the post stated.

“In the midst of a global pandemic, we’re experiencing an unprecedented level of distrust in traditional financial institutions,” Blockchain.com Co-Founder and CEO Peter Smith wrote in the post. “… It’s time to bring billions of people into crypto and millions of institutions around the world. It’s time to build a financial system for the internet.”

In other news, MicroStrategy continues to dive deeper into its bitcoin investment.

The enterprise software firm upped its debt sale of senior convertible notes to $900 million, an increase of 50 percent from the $600 million announced Tuesday (Feb. 16) in a press release. The company plans to buy additional bitcoin with the money raised from the offering, which is expected to close Friday (Feb. 19).

Lastly, Bitcoin continued to rise Wednesday amid its recent increase in mainstream use and popularity. The coin was valued at $52,460.715 as of 7:28 p.m. Eastern time Wednesday.

“We believe the story and theme here is much larger than just investing in Bitcoin and predicting its future price, but rather around the potential ramifications that crypto, blockchain and bitcoin could have across the technology and corporate world for the next decade,” Wedbush Securities Managing Director Dan Ives told CNBC.

Anthony Scaramucci, founder of SkyBridge Capital, a hedge fund heavily invested in bitcoin, told CNBC in a separate report that he expects bitcoin to hit $100,000 by the end of 2021, almost twice its current value.

“It’s just a supply and demand situation,” Scaramucci told CNBC. “You don’t have a lot of supply out there and very heavy demand.”

SkyBridge started its bitcoin fund in December and currently counts over a half billion dollars in bitcoin. But Scaramucci also warned investors that “the thing is volatile,” and that individual investors should remain cautious.