Connect with us
Active Currencies 14794
Market Cap $2,467,692,571,200.00
Bitcoin Share 51.25%
24h Market Cap Change $-0.87

UpToken ICO: SEC targets all parties involved, issues $3.9 million in fines

2min Read

The SEC has issued a cease-and-desist order against Coinme and its related entities for offering an unregistered and misleading crypto token, UpToken.

UpToken ICO: SEC targets all parties involved, issues $3.9 million in fines

Share this article

  • The SEC has issued a cease-and-desist order against Coinme and its related entities for offering an unregistered and misleading crypto token.
  • Coinme, its subsidiary Up Global Inc., and their founder and CEO Neil Bergquist have been fined up to $3.9 million.

The U.S. Securities and Exchange Commission (SEC) has issued a cease-and-desist order against crypto platform Coinme and its related entities for offering an unregistered and misleading token named UpToken, reported Reuters.

In connection with the case, Coinme, its subsidiary Up Global Inc., and their founder and CEO Neil Bergquist have been fined up to $3.9 million.

It was in 2017 that Coinme and Up Global held an initial coin offering (ICO) for the Ethereum [ETH]-based crypto asset UpToken in order to raise funding to extend Coinme ATM operations across the country.

According to the SEC, investors were persuaded to believe that Up Global would limit the supply of UpToken, whilst Coinme would create a constant demand for UpToken to fund a Bitcoin [BTC] automated teller machine incentives program, hence increasing the value of UpToken.

The regulatory body further claimed that Up Global and Bergquist misled investors by fraudulently claiming that the sale raised $10- $18.9 million, even when they knew it had raised barely $3.65 million.

Coinme and Up Global will pay $3.77 million without admitting or denying any wrongdoing, while Bergquist will pay a fine of $150,000. The amount of all the fines totals $3.9 million. Bergquist has also been barred from serving as an officer or director of a public company for three years.

Uptoken violated U.S. securities laws, claims SEC

According to the premier financial regulator, Uptoken was advertised and offered to investors as an investment contract, which is considered a security under U.S. financial rules; hence, all parties engaged in the ICO were accused of selling an unregistered security.

According to the SEC’s report, the commission has issued a cease-and-desist order to Coinme and Up Global, prohibiting both companies from participating in any coin offering indefinitely. All the parties have also agreed to destroy all UpTokens in their possession.

The SEC has been cracking down on cryptocurrency markets since Gary Gensler became its chair in 2021.

Gensler recently told the House Financial Services Committee (HFSC) that crypto markets were “rife with noncompliance” that put investors at risk and undermined public trust in capital markets.

Share

Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.