- Attorney General for New York demands that Coin Cafe repays $4.3 million to its deceived users.
- The trading platform stands accused of changing its charging fee several times without clearly informing its clients.
- Investors can request funds from Coin Cafe via email or the firm’s website.
The New York Attorney General instructed the Brooklyn-based cryptocurrency trading platform—Coin Cafe—to pay back $4.3 million to the investors who were victims of the company’s excessive usage charges.
On May 18, the Office of the New York State Attorney General published a press release accusing Coin Cafe of defrauding its investors and charging them for reasons unknown to them and the public.
The New York Attorney General, Letitia James, stated that the trading platform is to pay full restitution to New Yorkers and all US-based investors and must make the announcement on or before May 23.
Coin Cafe is a cryptocurrency trading platform that allows clients to safely store their BTC in wallet storage on their Coin Cafe account.
Although the crypto firm initially applied for a license to digital currency with the New York State Department of Financial Services in 2015, it was granted in January 2023.
Despite the lengthy application process, Coin Cafe was granted permission to operate between then and now. However, it was indicated to have put its users at risk for not registering with the Office of the Attorney General for New York as expected.
According to the press release, the OAG had investigated the accused company and discovered that the trading platform was billing users of “exorbitant and undisclosed fees” for using its wallet storage despite affirming on its website that it was free.
“These fees to store BTC were so high that they wiped out investors’ accounts entirely,” the press release states.
According to the accusations, Coin Cafe allegedly charged an investor $10,000 within a month, while another investor was charged $51,000 within 13 months. The firm had agreed to pay the restitution fee to those it deceived and misled, also agreeing to its misconduct of routinely charging its users at a high rate without clearly alerting them of its misdeeds.
Coin Cafe will repay all its investors and $508,000 to over 340 New York users who were all charged without their consent or knowledge. The company was said to have implemented its deceptive charges fee structure in October 2022, billing its users 7.99% of the account or $99 worth of BTC monthly if the users remained inactive on the trading platform within 30 days.
Letitia James reminded the public that it was necessary to have functioning regulations around cryptocurrency dealings else companies would likely take advantage of their customers.
“Coin Cafe defrauded hundreds of New Yorkers with its deceptive marketing, and because of a lack of effective regulation,” the Attorney General said.
Conclusion
Investors on Coin Cafe were unlawfully charged 96% of their account holdings without their permission and notice. The trading platform completely cleared out several accounts of their stored funds.
