- SEC Issues Cease-And-Desist Order Against Coinme And Up Global – 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.
- Fines Totaling $3.9 Million Levied Against All Parties Involved – 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.
- Background On The Case Against Coinme And Related Defendants – 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.
Overview Of SEC’s Complaints 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.
ICO Raised Funds To Expand ATM Operations Across The Country
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.
Violations Of Unregistered Security Sale Laws Alleged By SEC
However, the U.S. financial regulator stated that Uptoken was marketed and sold to investors as an investment contract and is considered a security under U.S. financial laws; thus, all parties involved in the ICO were accused of selling an unregistered security in violation of federal laws governing securities sales in United States markets..
Misleading Statements Made To Investors About Supply Limitation
In addition,the SEC report also stated that Up Global and Bergquist had falsely informed potential investors about limiting supply of UpToken as well as thatCoinmewould constantly be in needofUpTokento fundtheirATM rewardsprogram which would leadtoan increaseinpriceofassetinthelongrun . Unknown to unsuspecting investors ,the firms behindUptokenhadtaken stepstoacquirea substantialamountoftheassetbeforetheICObeganandthroughouttheentireprocess .