SEC Imposes Fines and Cease-and-Desist Orders on Three Parties Involved in UpToken

The U.S. Securities and Exchange Commission (SEC) has imposed fines and cease-and-desist orders on three parties involved in UpToken, a cryptocurrency securities offering. Up Global, Coinme, and Neil Bergquist, CEO and founder of both companies, were found to have sold securities without registering and without obtaining an exemption from registration. The three parties raised $3.65 million through the ICO sale of an Ethereum-based cryptocurrency called UpToken, which was intended to fund the deployment of new Coinme ATMs.

Allegations against Up Global and Bergquist

The SEC alleged that Up Global and Bergquist falsely claimed that Up Global would limit the supply of UpToken and that Coinme would need to buy back the asset from investors, thus creating demand and increasing token value. However, Up Global and Bergquist secured a significant supply of UpToken before and during the ICO. Additionally, Up Global and Bergquist reported misleading fundraising amounts, stating that up to $18.9 million had been raised when only $3.7 million had been raised.

Consequences for the Parties Involved

The SEC’s order requires all three parties to destroy all UpToken in their possession. Up Global and Coinme will also be required to publish a notice of the order and request that other trading platforms remove the token from their services. The two companies must also indefinitely refrain from taking part in any cryptocurrency security offering. Bergquist must refrain from taking part in crypto securities offerings for just three years and will be allowed to trade other cryptocurrencies on a personal basis.

Fines Imposed

Each party will also pay a fine to the SEC. Up Global will pay $3.52 million, CoinMe will pay $250,000 and Bergquist will pay $150,000. Together, those fines are close to the amount raised by the UpToken ICO.

In conclusion, the SEC has taken action against Up Global, Coinme and Neil Bergquist for selling securities without registering and obtaining an exemption from registration. The parties involved have been ordered to destroy all UpToken in their possession, pay fines, and refrain from taking part in any cryptocurrency security offering.