Coin Cafe’s Roller Coaster Ride: From Approval Delays to Allegations

It seems that Coin Cafe, nestled in the heart of Brooklyn, has had quite the turbulent journey. After a mind-boggling seven-and-a-half years in limbo, waiting for a virtual currency license from the New York State Department of Financial Services, they finally had their day in the sun… or so they thought. They were given the green light in January, but not before facing some serious scrutiny for their practices.

What Went Wrong? The Fee Turmoil

As the saying goes, “There’s no such thing as a free lunch,” and Coin Cafe’s wallet storage fees sound like they could be one of those lunches—only much, much more expensive. Investigators found that investors were hit with undisclosed and exorbitant fees, which resulted in some accounts being entirely drained. Yes, you read that right: entire accounts wiped out! One poor soul faced a staggering bill of over $10,000 in a single month. Yikes!

Confessions of a Crypto Exchanger: Fee Changes Galore

According to New York State Attorney General Letitia James, Coin Cafe wasn’t just charging fees; they were playing a stealth game of musical chairs with their fee structures. They changed their fee model four times since September 2020 without notifying their users; it’s like changing the rules of Monopoly without telling anyone. Their most controversial change came in October 2022, introducing a fee for inactivity, which could amount to either 7.99% of the account balance or a flat $99 worth of Bitcoin if the investor didn’t buy, sell, or transfer Bitcoin within a month. Talk about a drain!

The Long Arm of Regulation: Where Were You?

James pointed out the unfortunate fact that Coin Cafe was allowed to operate without proper oversight for years, putting investors at risk while they waited for their official license. The concerns around regulation in the cryptocurrency market have reached a worrying level, with many calling for stricter measures to protect consumers. As James wisely noted, “This is yet another example of why the cryptocurrency industry needs to be better regulated.”

What’s Next for Coin Cafe Users?

The investigation concluded with a hefty obligation for Coin Cafe—they need to refund all fees to U.S.-based investors, provided those investors request a refund in the next year. Last minute tip: If you think you might be entitled to some of that money, check your email soon! Coin Cafe has to notify all U.S.-based customers about their eligibility by May 23. Don’t sleep on it, folks; otherwise, you may miss the chance to reclaim your coins!