SEC Fines Crypto Companies $3.9M: Mismanagement & Risky Deposits Cause Failures
• The U.S. Securities and Exchange Commission (SEC) imposed cease-and-desist orders and fines upon three parties involved in UpToken on April 28.
• These three parties are Up Global, Coinme, and Neil Bergquist, founder and CEO of both companies.
• They successfully raised about $3.65 million of cryptocurrency from the ICO, which was sold without registering or obtaining an exemption from registration.
SEC Imposes Fines on Three Parties
The U.S. Securities and Exchange Commission (SEC) recently imposed cease-and-desist orders and fines upon three parties involved in the UpToken Initial Coin Offering (ICO). These three parties are Up Global, Coinme, and Neil Bergquist, founder and CEO of both companies.
UpToken ICO Raised $3.65 Million
The offering involved the sale of an Ethereum-based cryptocurrency called UpToken with the goal of funding the deployment of new Coinme ATMs. Through this ICO they were able to raise approximately $3.65 million worth of cryptocurrency, with part of these funds being used to purchase new ATMs for their network. Those who purchased UpToken received discounts and rewards when using them with Coinme ATMs.
SEC Complains About Unregistered Sale
However, the SEC complained that the participants sold securities without registering or obtaining an exemption from registration requirements set by the SEC rules. Furthermore, they falsely claimed that limiting supply would increase token value as well as falsely claiming that Coinme would need to buy back tokens from investors to create demand for them further increasing their value..
Fines Imposed by SEC
In order to address these issues the SEC issued fines amounting to a total of $3 .9 million against all those involved in this unregistered sale as well as issuing cease-and-desist orders against them all forbidding any future activities related to securities offerings without first registering or obtaining exemptions regarding such offerings before proceeding with them .
This case serves as a reminder that all offerings involving securities should be registered or obtain exemptions beforehand in order to avoid legal troubles with authorities like the SEC in the United States or other entities in other jurisdictions around the world .