Coin Cafe surrenders $4.3M to New York AG over exorbitant fee structure
The New York Attorney General’s Office said. May 18th It has filed a lawsuit against cryptocurrency company Coin Cafe and announced that it has returned $4.3 million after it was found to have charged wallet users extremely high fees.
The agency said Coincafe advertised its wallet service as free and did not sufficiently inform users of the actual fee structure.
Overcharging users
The company reportedly charged New Yorkers tens of thousands of dollars in fees and completely depleted certain user account balances.
Coin Cafe changed its fee structure four times, introducing a particularly free fee increase in October 2022. At that time, it began charging users 7.99% or $99 per month, whichever was greater, if they did not trade cryptocurrencies for 30 days.
Coincafe plans to pay investors, including $508,000 to 340 New York individuals. The company will be allowed to continue operating, but must limit monthly fees to 0.002% and properly notify users of all fees.
New York has strict regulations
Unlike several other companies targeted by the New York State Attorney General, Coincafe successfully obtained a state bit license in 2023. However, the company continued to charge exorbitantly high fees even after obtaining the license.
The company also failed to register with the New York State Attorney General’s Office, which should be done in addition to obtaining a state bit license.
New York State Attorney General Letitia James called Coincafe’s conduct “another example of why the cryptocurrency industry needs to be better regulated.”
The announcement also mentions James’ recently proposed crypto-specific regulations, which could lead to further enforcement.
The story of Coin Cafe transferring $4.3 million to New York AG over exorbitant fee structure first appeared on CryptoSlate.
