- The Securities and Exchange Commission has issued a cease and desist order to Coinme in relation to UpToken.
- The securities regulator also imposed a fine of almost $4 million on the crypto firm and associated parties.
- Coinme and Up Global were booked by the regulator for the unregistered and misleading offering of their UpToken.
The U.S. Securities and Exchange Commission (SEC) has imposed a multi-million dollar fine on the Seattle-based crypto giant Coinme and Up Global Inc. The fine settled an ongoing case related to the initial coin offering (ICO) of the crypto firm’s Ethereum-based UpToken back in 2017.
Coinme Fined For Unregistered ICO
According to an SEC document, the cease and desist order was imposed as per the U.S. Securities Act and the Securities Exchange Act. The case dates back to 2017 when Coinme and its Up Global unit conducted a misleading ICO of their UpToken and raised more than $3.6 million. The funds were used by the crypto firm to expand its Bitcoin ATM network. The proceeds of the ICO were reportedly also for several other corporate purposes.
The SEC found that the UpToken issued by Coinme were sold as investment contracts and therefore securities as per the controversial Howey Test. The regulator cited the additional benefits that were made available to UpToken investors to strengthen its case against the firm. The firm was also accused of selling securities without registration and limiting the supply of its token to artificially inflate its demand. The firm’s Chief Executive Officer Neil Bergquist was also named in the complaint.
An UpToken investor would have had a reasonable expectation of obtaining a future profit from the rise in value of UpToken based upon Respondents’ efforts.”
U.S. Securities and Exchange Commission
Coinme reportedly submitted an offer of settlement in anticipation of enforcement actions from the securities regulator. As part of the settlement, a $3.52 million penalty was imposed on Up Global along with a $250,000 fine on Coinme. Ceo Neil Bergquist has also been ordered to pay a civil penalty of $150,000, bringing the total settlement to almost $4 million.
Source : Ethereum World News