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Brooklyn-based cryptocurrency firm Coin Cafe has been ordered by the Attorney General’s Office to return more than $4 million to crypto investors.
After investigation it is found that the company has charged users exorbitant fees without their consent.
“free” but not free
one in Press release On May 18, the New York Attorney General’s office alleged that Coin Cafe charged investors high fees to store bitcoin with the company’s wallets, despite advertising the service as “free” on its website.
Coin Cafe, which recently received approval for a virtual currency license, also known as BitLicense, from the New York State Department of Financial Services (DFS) in January 2023, claimed to offer free storage services for investors , but began charging for crypto storage in September. 2020 without notifying customers.
Based on the investigation, the company raised the fee four separate times, each higher than the previous fee. In October 2020, Coin Cafe posted what the press release described as “the harshest fee structure” where the platform charged users $99 in bitcoin per month if they traded or bought BTC on their site within a month. did not transfer.
In addition, a New York client paid $10,000 in fees in one month, while the crypto trading company charged more investors up to $51,000 in 13 months.
Subsequently, Coin Cafe’s exorbitant fees left investors’ accounts with nothing. According to a statement from the press release:
“Ultimately, Coin Cafe charged more than 300 New York investors storage fees. Coin Cafe took hundreds of thousands of dollars worth of bitcoin from its investors and completely wiped hundreds of investor accounts down to zero balances.
Coin Cafe will reduce wallet storage service to 0.002% per BTC
Meanwhile, Coin Cafe has entered into a settlement with the New York Attorney General’s Office to refund defrauded investors. As part of the settlement, the firm will pay $4.3 million to all affected investors, including $508,000 to more than 340 users in New York.
Coin Cafe will limit fees for its wallet service to 0.002 percent per bitcoin monthly, with the company also being transparent about its fees to investors. Furthermore, the crypto firm will provide monthly updates to the Attorney General’s office regarding the status of the refund.
According to a statement by New York Attorney General Letitia James,
“Coin Cafe defrauded hundreds of thousands of New Yorkers out of thousands of dollars due to their deceptive marketing and lack of effective regulation. This is yet another example of why the cryptocurrency industry needs to be better regulated like any other financial institution , where New York investors put their hard-earned money.
In addition, James’ office claimed that Coin Cafe did not register with the New York Attorney General’s Office as a commodities dealer-broker, as required by state law.
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Brooklyn-based cryptocurrency firm Coin Cafe has been ordered by the Attorney General’s Office to return more than $4 million to crypto investors.
After investigation it is found that the company has charged users exorbitant fees without their consent.
“free” but not free
one in Press release On May 18, the New York Attorney General’s office alleged that Coin Cafe charged investors high fees to store bitcoin with the company’s wallets, despite advertising the service as “free” on its website.
Coin Cafe, which recently received approval for a virtual currency license, also known as BitLicense, from the New York State Department of Financial Services (DFS) in January 2023, claimed to offer free storage services for investors , but began charging for crypto storage in September. 2020 without notifying customers.
Based on the investigation, the company raised the fee four separate times, each higher than the previous fee. In October 2020, Coin Cafe posted what the press release described as “the harshest fee structure” where the platform charged users $99 in bitcoin per month if they traded or bought BTC on their site within a month. did not transfer.
In addition, a New York client paid $10,000 in fees in one month, while the crypto trading company charged more investors up to $51,000 in 13 months.
Subsequently, Coin Cafe’s exorbitant fees left investors’ accounts with nothing. According to a statement from the press release:
“Ultimately, Coin Cafe charged more than 300 New York investors storage fees. Coin Cafe took hundreds of thousands of dollars worth of bitcoin from its investors and completely wiped hundreds of investor accounts down to zero balances.
Coin Cafe will reduce wallet storage service to 0.002% per BTC
Meanwhile, Coin Cafe has entered into a settlement with the New York Attorney General’s Office to refund defrauded investors. As part of the settlement, the firm will pay $4.3 million to all affected investors, including $508,000 to more than 340 users in New York.
Coin Cafe will limit fees for its wallet service to 0.002 percent per bitcoin monthly, with the company also being transparent about its fees to investors. Furthermore, the crypto firm will provide monthly updates to the Attorney General’s office regarding the status of the refund.
According to a statement by New York Attorney General Letitia James,
“Coin Cafe defrauded hundreds of thousands of New Yorkers out of thousands of dollars due to their deceptive marketing and lack of effective regulation. This is yet another example of why the cryptocurrency industry needs to be better regulated like any other financial institution , where New York investors put their hard-earned money.
In addition, James’ office claimed that Coin Cafe did not register with the New York Attorney General’s Office as a commodities dealer-broker, as required by state law.
Binance Free $100 (Exclusive): Use this link to register and get $100 free and 10% off on Binance Futures for the first month. (terms).
PrimeXBT SPECIAL OFFER: Use this link to register and enter the code CRYPTOPOTATO50 to receive up to $7,000 on your deposit.
