The New York Attorney General’s office said on May 18 that it had successfully taken action against crypto company Coin Cafe, which forked out $4.3 million after the agency found it was charging wallet users extremely high fees.
The agency stated that Coin Cafe advertised its wallet service as free and failed to fully inform users of the actual cost structure.
Overburdening users
The company reportedly charged New York residents 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 unnecessary fee increase in October 2022. At that point, it started charging users more than 7.99% or $99 per month if they did not make a crypto transaction for a period of 30 days.
Coin Cafe will now pay refunds to investors, including $508,000 to 340 individuals in New York State. The company is allowed to continue operating, but must limit monthly costs to 0.002% and adequately inform users about all costs.
New York has strict rules
Unlike some other companies targeted by the New York Attorney General, Coin Cafe successfully obtained the state’s BitLicense in 2023. However, the company continued to overcharge even after obtaining that license .
The company also failed to register with the New York Attorney General’s office, which it should have done in addition to obtaining the state’s BitLicense.
New York Attorney General Letitia James called Coin Cafe’s actions “another example of why the cryptocurrency industry needs to be better regulated.”
The current announcement also mentioned recently proposed crypto-specific regulations from James that could lead to further enforcement.
The post Coin Cafe Surrenders $4.3 Million to New York AG Due to Exorbitant Fee Structure appeared first on CryptoSlate.
