by • The SEC levied fines of nearly $4 million against Coinme, its subsidiary Up Global SEZC, and the CEO Neil Bergquist for allegedly offering unregistered securities and making “misleading statements” on their crypto token, UpToken (UP).
• UP holders received benefits such as discounted fees and a 1% cashback paid in UP when using the ATMs.
• Coinme and Bergquist agreed to pay separate penalties of $250,000 and $150,000 respectively.
SEC Levies Fines For Unregistered Securities
The United States securities regulator has handed down nearly $4 million in fines to crypto exchange Coinme for allegedly offering unregistered securities and giving “misleading statements” on its crypto token UpToken (UP). On April 28 the Securities and Exchange Commission (SEC) said it settled charges against Coinme, its subsidiary Up Global SEZC and the CEO of both firms, Neil Bergquist.
ICO Raised Funds To Expand ATM Fleet
Up Global agreed to pay a $3.52 million penalty, for which Coinme was also liable. Separate penalties against Coinme and Bergquist of $250,000 and $150,000 respectively were also leveled, which both have agreed to pay. The Initial Coin Offering (ICO) of UP between October to December 2017 raised around $3.6 million to expand the amount of Bitcoin BTC ATMs in Coinme’s fleet.
False Statements Made About Demand For Token
In its order, the SEC alleged that Bergquist and Up Global made “false and misleading statements” about the demand for UpToken and the amount raised in the offering. Up Global said that Coinme’s purchasing of UP would create constant demand for the token but this was not true according to the SEC.
Price And Market Cap Of Token Have Dropped
The price of UP has seen a significant drawdown since with its market cap also falling to around $50,000 and 24-hour trading volumes topping just over $180. By July 2019 Coinme shut down all of its own ATMs leaving no use or purpose for the token anymore.
Conclusion: Settled Charges Against Firms And CEO
In conclusion all parties involved have accepted liability by agreeing to settle charges brought forward by US regulatory body -the SEC-for offering unregistered securities as well as making false statements about their cryptocurrency token -UpToken-.
