Users reportedly paid exorbitant, undisclosed fees for storing bitcoins on Coin Cafe. A charge that drained funds from investors’ Bitcoin accounts. According to current crypto regulations, this is a fraudulent situation. Hence the condemnation of Coin Cafe. Today, the platform must pay 4.3 million dollars in reimbursement.
Reason for conviction: Exorbitant and undisclosed fees
On May 18, the New York Attorney General’s office reveals that Coin Cafe was charging inflated fees to store bitcoins. The crypto trading platform has however refrained from informing its users. Result: many of them have exhausted their bitcoin account.
THE Press release in particular cites a user charged a total of $51,000 over 13 months. Another investor was forced to pay fees over $10,000 in a single month.
Cafe Corner steadily increasing fees without informing investors. For the Attorney General of New York, it is a fraud. This is why the platform is today condemned to reimburse 4.3 million dollars to its users. According to surveys, it had already rectified its fees upwards 4 times since September 2020 (still without informing its users).
Coin Cafe just got its BitLicense
Coin Cafe is a crypto exchange specializing in Bitcoin. Based in Brooklyn, he failed to register with the OAG as a commodity broker (as required by law). In 2015, he then decided to apply for a BitLicense with the New York State Department of Financial Services (DFS). The request was approved in January 2023.
In the meantime and despite the fact that it is not not registered with the OAG, it was allowed to run. On the other hand, it has been reported as endangering users.
Coin Cafe’s actions once again show the importance of clear and strict crypto regulations. The goal: to better protect investors.
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