This case was last updated from PACER on 04/18/2021 at 08:40:39 (UTC).

Securities and Exchange Commission v. Coinseed, Inc. et al

Case Summary

On February 17, 2021, the Securities and Exchange Commission (“SEC”), represented by Mark Raymond Sylvester and Richard R. Best, both attorneys at SEC’s New York Regional Office, filed a civil enforcement action against Coinseed, Inc. (“Coinseed”) and its founder and chief executive officer Delgerdalai Davaasambuu (“Davaasambuu”) (collectively, “Defendants”), seeking permanent injunctive relief, disgorgement with prejudgment interest, and civil penalties for violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. This case was filed in U.S. District Court in the Southern District of New York with Judge Paul G. Gardephe presiding.

 

In its complaint, the SEC alleged that “from at least December 2017 to May 2018, Defendants offered and sold digital assets called “CSD tokens” as securities to investors, in return for consideration worth at least $141,000. Defendants told investors that their investments would be used to develop Coinseed’s business, including a mobile phone application that purportedly enabled users to purchase and sell digital assets, and to pay other business expenses.” It has also been alleged by the SEC that “Defendants offered and sold CSD tokens without registering the offering with the SEC as required by the federal securities laws, and no exemption from this registration requirement was available for the offering.”

 

The SEC further alleged that “Defendants offered and sold CSD tokens without registering the offering with the SEC as required by the federal securities laws, and no exemption from this registration requirement was available for the offering,” and that “in connection with their offer and sale of CSD tokens, Coinseed never provided investors with the type of material information that issuers are required to include in registration statements when soliciting public investment. Instead, investors were left to rely only on the information Defendants chose to share about Coinseed and CSD tokens.”

 

In their only cause of action, the SEC claims that both Defendants, Coinseed and Davaasambuu violated and, unless enjoined, will again violate, Securities Act Sections 5(a) and 5(c) [15 U.S.C. §§ 77e(a) and 77e(c)]. Pursuant to this claim, the Commision allied that “Coinseed and Davaasambuu, directly or indirectly, singly or in concert, (i) made use of means or instruments of transportation or communication in interstate commerce or of the mails to sell, through the use or medium of a prospectus or otherwise, securities as to which no registration statement was in effect; (ii) for the purpose of sale or for delivery after sale, carried or caused to be carried through the mails or in interstate commerce, by any means or instruments of transportation, securities as to which no registration statement was in effect; or (iii) made use of means or instruments of transportation or communication in interstate commerce or of the mails to offer to sell or offer to buy, through the use or medium of a prospectus or otherwise, securities as to which no registration statement had been filed.”

 

In its prayer for relief, the SEC requested the court for an injunctive order, disgorgement with pre judicial interest, prohibition from participating, directly or indirectly, in any offering of a digital asset security and civil monetary penalties. 

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    1:21-CV-01381

  • Filing Date:

    02/17/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

Paul G. Gardephe

 

Party Details

Plaintiff

Securities and Exchange Commission

Defendants

Delgerdalai Davaasambuu

Coinseed, Inc.

Attorney/Law Firm Details

Plaintiff Attorneys

Richard R. Best

Attorney at U.S. Securities and Exchange Commission

200 Vesey Street, Ste 400

New York, NY 10281

Mark Raymond Sylvester

Attorney at U.S. Securities and Exchange Commission

1617 Jfk Blvd, Suite 520

Philadelphia, PA 19103

Defendant Attorneys

Jason P. Gottlieb

Attorney at Morrison Cohen, LLP (NY)

909 Third Avenue

New York, NY 10022

Michael Andrew Mix

Attorney at Morrison Cohen, LLP (NY)

909 Third Avenue

New York, NY 10022

 

Court Documents

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3 More Documents Available
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Docket Entries

  • 04/09/2021
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  • Docket(#15) JOINT STIPULATION AND ORDER TO EXTEND DEFENDANTS' TIME TO RESPOND TO THE COMPLAINT: NOW, THEREFORE, pursuant to Rule I.D of the Court's Individual Rules of Practice for Civil Cases, it is hereby stipulated between the SEC and Defendants that Defendants' time to respond to the Complaint be extended to June 4, 2021. The conference currently scheduled for May 20, 2021 is adjourned to June 24, 2021 at 9:45 a.m. SO ORDERED. (Signed by Judge Paul G. Gardephe on 4/9/2021) Coinseed, Inc. answer due 6/4/2021; Delgerdalai Davaasambuu answer due 6/4/2021.( Initial Conference set for 6/24/2021 at 09:45 AM before Judge Paul G. Gardephe.) (ks) (Entered: 04/09/2021)

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  • 04/08/2021
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  • Docket(#14) PROPOSED STIPULATION AND ORDER. Document filed by Coinseed, Inc., Delgerdalai Davaasambuu..(Gottlieb, Jason) (Entered: 04/08/2021)

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  • 04/06/2021
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  • Docket(#13) WAIVER OF SERVICE RETURNED EXECUTED. Delgerdalai Davaasambuu waiver sent on 3/29/2021, answer due 5/28/2021. Document filed by Securities and Exchange Commission..(Sylvester, Mark) (Entered: 04/06/2021)

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  • 04/06/2021
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  • Docket(#12) AFFIDAVIT OF SERVICE. Coinseed, Inc. served on 2/26/2021, answer due 3/19/2021. Service was made by Mail. Document filed by Securities and Exchange Commission..(Sylvester, Mark) (Entered: 04/06/2021)

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  • 04/05/2021
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  • Docket(#11) NOTICE OF APPEARANCE by Michael Andrew Mix on behalf of Coinseed, Inc., Delgerdalai Davaasambuu..(Mix, Michael) (Entered: 04/05/2021)

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  • 04/05/2021
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  • Docket(#10) NOTICE OF APPEARANCE by Jason P. Gottlieb on behalf of Coinseed, Inc., Delgerdalai Davaasambuu..(Gottlieb, Jason) (Entered: 04/05/2021)

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  • 03/29/2021
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  • Docket(#9) LETTER addressed to Judge Paul G. Gardephe from Mark R. Sylvester dated March 29, 2021 re: Transmittal of Notice and Rules to Defendants' Counsel. Document filed by Securities and Exchange Commission. (Attachments: #1 Exhibit 3/26/21 Letter to Defendants' Counsel).(Sylvester, Mark) (Entered: 03/29/2021)

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  • 02/20/2021
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  • Docket(#8) NOTICE OF PRETRIAL CONFERENCE: Counsel for all parties are directed to appear before the Court for an initial pretrial conference in accordance with Rule 16 of the Federal Rules of Civil Procedure on May 20, 2021 at 10:30 a.m. in Courtroom 705 of the Thurgood Marshall United States Courthouse, 40 Foley Square, New York, New York. So Ordered. Initial Conference set for 5/20/2021 at 10:30 AM in Courtroom 705, 40 Centre Street, New York, NY 10007 before Judge Paul G. Gardephe. (Signed by Judge Paul G. Gardephe on 2/19/2021) (js) (Entered: 02/22/2021)

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  • 02/19/2021
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  • Docket(#7) ELECTRONIC SUMMONS ISSUED as to Coinseed, Inc...(pc) (Entered: 02/19/2021)

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  • 02/19/2021
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  • Docket(#6) ELECTRONIC SUMMONS ISSUED as to Delgerdalai Davaasambuu..(pc) (Entered: 02/19/2021)

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  • 02/18/2021
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  • Docket(#5) REQUEST FOR ISSUANCE OF SUMMONS as to Delgerdalai Davaasambuu, re: #1 Complaint. Document filed by Securities and Exchange Commission..(Sylvester, Mark) (Entered: 02/18/2021)

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  • 02/18/2021
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  • Docket(#4) REQUEST FOR ISSUANCE OF SUMMONS as to Coinseed, Inc., re: #1 Complaint. Document filed by Securities and Exchange Commission..(Sylvester, Mark) (Entered: 02/18/2021)

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  • 02/18/2021
  • DocketCase Designated ECF. (jgo) (Entered: 02/18/2021)

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  • 02/18/2021
  • DocketMagistrate Judge Sarah Netburn is so designated. Pursuant to 28 U.S.C. Section 636(c) and Fed. R. Civ. P. 73(b)(1) parties are notified that they may consent to proceed before a United States Magistrate Judge. Parties who wish to consent may access the necessary form at the following link: #https://nysd.uscourts.gov/sites/default/files/2018-06/AO-3.pdf. (jgo) (Entered: 02/18/2021)

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  • 02/18/2021
  • DocketCASE OPENING INITIAL ASSIGNMENT NOTICE: The above-entitled action is assigned to Judge Paul G. Gardephe. Please download and review the Individual Practices of the assigned District Judge, located at #https://nysd.uscourts.gov/judges/district-judges. Attorneys are responsible for providing courtesy copies to judges where their Individual Practices require such. Please download and review the ECF Rules and Instructions, located at #https://nysd.uscourts.gov/rules/ecf-related-instructions..(jgo) (Entered: 02/18/2021)

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  • 02/18/2021
  • Docket***NOTICE TO ATTORNEY REGARDING CIVIL CASE OPENING STATISTICAL ERROR CORRECTION: Notice to attorney Richard R. Best. The following case opening statistical information was erroneously selected/entered: County code Albany; Fee Status code pd (paid);. The following correction(s) have been made to your case entry: the County code has been modified to New York; the Fee Status code has been modified to wv (waived);. (jgo) (Entered: 02/18/2021)

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  • 02/17/2021
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  • Docket(#3) NOTICE OF APPEARANCE by Mark Raymond Sylvester on behalf of Securities and Exchange Commission..(Sylvester, Mark) (Entered: 02/17/2021)

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  • 02/17/2021
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  • Docket(#2) CIVIL COVER SHEET filed..(Sylvester, Mark) (Entered: 02/17/2021)

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  • 02/17/2021
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  • Docket(#1) COMPLAINT against Coinseed, Inc., Delgerdalai Davaasambuu. Document filed by Securities and Exchange Commission..(Best, Richard) (Entered: 02/17/2021)

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