Coin Cafe Settles with New York AG for $4.3 Million to Resolve Allegations of Exorbitant and Deceptive Crypto Storage Fees

  • New York AG Letitia James settled with cryptocurrency trading platform Coin Cafe, Inc. to resolve allegations that the company violated the Martin Act and New York Executive Law by misleading investors about the excessive storage fees it charged to use its wallet storage services. The company also allegedly failed to register as a commodity broker dealer with the OAG.
  • According to AG James, Coin Cafe marketed its wallet storage as “free” on its website, but charged users exorbitant and undisclosed fees that were so high they wiped out investors’ accounts entirely in some instances.
  • Under the terms of the settlement, Coin Cafe must pay $4.3 million, including more than $508,000 in restitution to New York investors who were misled. The company also agreed to a cap on monthly storage fees for use of its wallet and clear disclosures to customers regarding storage fees, among other provisions.
  • We have covered other recent enforcement efforts by AG James within the cryptocurrency industry, including lawsuits brought against KuCoin and Celsius. AG James also recently announced proposed legislation to increase regulations of the cryptocurrency industry.