SEC Fines Coinme $3.9M for Unregistered, Misleading UpToken ICO

• The U.S. Securities and Exchange Commission (SEC) issued a cease-and-desist order against crypto exchange giant Coinme and its business subsidiary Up Global Inc., for conducting an unregistered and disingenuous coin offering of the cryptocurrency UpToken.
• In addition, both companies, along with their founder and CEO Neil Bergquist, have been ordered to pay fines summing up to a total of $3.9 million.
• The SEC report also revealed that Coinme and related parties had misled the public, claiming a total of $18.5 million had been raised from the ICO in contrast to the original amount of $3.65 million.

SEC Issues Cease-And-Desist Against Coinme And Related Parties

The U.S. Securities and Exchange Commission (SEC) has issued a cease-and-desist order against crypto exchange giant Coinme and its business subsidiary Up Global Inc., for conducting an unregistered and disingenuous coin offering of the cryptocurrency UpToken. In addition, both companies, along with their founder and CEO Neil Bergquist, have been ordered to pay fines summing up to a total of $3.9 million.

Case Background

Back In 2017, Coinme and Up Global conducted an initial coin offering for the Ethereum-based asset UpToken with the aim of raising funds to expand Coinme ATM operations across the country. According to Friday settlement’s report by the SEC, the ICO generated a sum of $3.65 million, part of which was used to deploy 30 new Coinme ATMs, with the remainder being directed to other corporate purposes. However, Uptoken was marketed and sold as an investment contract; thus considered a security under U.S financial laws by SEC – making all parties involved in ICO guilty of selling unregistered security without proper registration or disclosures required under applicable securities law provisions..

Misleading Information

The SEC report also stated that Up Global and Bergquist had falsely informed potential investors about limiting supply of UpToken & thatCoinme would constantly be in needof UpToken to fund their ATM rewards program – this would leadto increase in pricein long run . Unknown to unsuspecting investors ,the firms behindUpToken had taken steps before & during ICOto acquire substantialamountof asset themselves – including internal transaction betweenCoinme &UpGlobal & roundtrip transaction involving Hong Kong affiliatedcompany .

False Claims About Funds Raised

Furthermore ,the SECreport alsorevealedthatCoinmewere misleadingthepublicclaimingtotalof$18 . 5millionhadbeenraisedfromICOincontrasttotheoriginal sumof$ 3 . 65million .

Conclusion

All accusations levied againstCoinme ,UpGlobal&BergquistbySECwerefinallysettledupwithpaymentoffinesamountingto$3 . 9million .

SEC Fines Coinme $3.9M for Unregistered, Misleading UpToken ICO
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