• 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.
• These accusations were levied against Coinme, Up Global, and Bergquist by the SEC, and all parties came to a settlement.
The Cease-and-Desist Order
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 For All Parties Involved
In addition to the cease-and-desist order, 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 as part of settlement reached with the SEC regarding these accusations.
The ICO And Allegations Against Coinme
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; however according to Friday settlement’s report by the SEC, this ICO was marketed as an investment contract which is considered a security under U.S financial laws thus making it illegal due to its unregistered nature . Furthermore, it was also revealed that both companies had taken steps such as internal transaction between them as well as a roundtrip transaction involving a Hong Kong company in order acquire substantial amount of this asset prior to its launch in addition to falsely informing investors about limiting supply & increase in token price over time .
Investors Misled About Raised Funds From ICO
Coinme further misled potential investors by claiming that they had raised 18.5 million from this ICO rather than 3.65 million which was actually raised .
Conclusion
All these accusations were levied against Coinme ,UpGlobal & Bergquist by SEC ,all parties settled down after paying fines amounting up to 3million dollars .