The US SEC Fines Coinme And Up Global Almost $4 Million In Total

Key Points:

• The SEC brought settlement charges against Coinme, the encryption ATM firm, Up Global, and Neil Bergquist, the two companies’ CEO, and fined a total of roughly $4 million US dollars.
• Bergquist was barred from serving as a director of publicly traded companies for three years after the SEC charged Up Global and Coinme with defrauding investors in the 2017 ICO and selling unregistered encrypted asset securities.

Coinme and Up Global have each been penalized up to $4 million by the SEC.

According to the US Securities and Exchange Commission’s official website, the SEC filed settlement charges against the encryption ATM company Coinme, the encryption project Up Global, and Neil Bergquist, the two companies’ CEO, and fined a total of roughly $4 million US dollars. 

Up Global was charged by the SEC of deceiving investors in the 2017 ICO and engaging in unregistered sales of encrypted asset securities, for which Coinme was jointly and severally liable, and Bergquist was also barred from serving as a director of publicly traded businesses for the next three years.

According to the order, Coinme, Up Global, and Bergquist engaged in unregistered offers and sales of crypto asset securities from October 16, 2017 to December 15, 2017, during which they marketed, among other things, the financial benefit that UpToken investors would reap from this firm purchasing UpToken in the secondary market after the ICO. 

The order also finds that, unbeknownst to UpToken investors, Bergquist and Up Global took steps prior to and during the ICO to obtain an UpToken supply that would significantly reduce Coinme’s need to purchase UpToken after the ICO, and that Bergquist and Up Global knowingly or recklessly publicly inflated amounts raised in the ICO.

The SEC’s ruling concludes that Coinme, Up Global, and Bergquist violated Sections 5(a) and 5(c) of the Securities Act of 1933, as well as Sections 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934, as well as Rule 10b-5 thereunder. Coinme, Up Global, and Bergquist agreed to resolve the allegations, cease and desist from future violations of those provisions, and comply with specific undertakings without admitting or rejecting the SEC’s conclusions.

Furthermore, Up Global agreed to pay a $3,520,000 penalty, for which Coinme is jointly and severally liable; Coinme agreed to pay a separate $250,000 penalty; and Bergquist agreed to pay a $150,000 penalty. Bergquist is also barred from serving as an officer or director of a public business for three years, according to the SEC decision.

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