Coin Cafe Pays Up $4.3M After Overcharging Customers

Key Points:

• The New York Attorney General successfully took action against crypto company Coin Cafe, which charged wallet users extremely high fees and misled users about the actual fee structure.
• Coin Cafe will pay $4.3 million in restitution to investors, including $508,000 to 340 individuals in the state of New York. The company will be allowed to continue operating but must limit monthly fees to 0.002% and must adequately inform users of all fees.
• Proposed crypto-specific regulation from the NY Attorney General could lead to further enforcement and better regulation of the cryptocurrency industry.

Office of the New York Attorney General revealed that it had taken action against crypto company Coin Cafe for its unfair business practices.

Coin Cafe was charging its users extremely high fees, which the company failed to adequately inform them about. The company advertised its wallet service as free, but charged tens of thousands of dollars in fees to its New York residents. The agency found that certain user account balances were completely depleted as a result of these fees.

Coin Cafe changed its fee structure four times, and in October 2022, it introduced an exorbitant fee increase. The company began to charge users the greater of 7.99% or $99 per month if they did not transact crypto over a 30-day period. As a result of its actions, Coin Cafe surrendered $4.3 million to the agency.

While Coin Cafe successfully obtained the state’s BitLicense in 2023, it continued to charge its users high fees even after obtaining the license. In addition, the company failed to register with the New York Attorney General’s office, which it should have done to comply with regulations.

Coin Cafe will now pay restitution to investors, including $508,000 to 340 individuals in the state of New York. The company will continue to operate but must limit its monthly fees to 0.002% and must adequately inform its users of all fees.

New York Attorney General Letitia James called out Coin Cafe’s practices and stated that this case is “another example of why the cryptocurrency industry needs to be better regulated.” This announcement also mentioned recently proposed crypto-specific regulation from James that could lead to further enforcement.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

Join us to keep track of news: https://linktr.ee/coincu

Annie

Coincu News