SEC Scorns UpToken and Imposes Crypto Fines

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By Jonathan Stempel

April 28 (Reuters) – The U.S. Securities and Exchange Commission has fined Seattle-based Coinme and related defendants nearly $4 million for making an unregistered and misleading offer of an asset cryptographic called UpToken.

Friday’s settlement resolves allegations that Coinme’s Up Global unit and Neil Bergquist, who ran the two entities, misled investors in a late 2017 initial coin offering for UpToken, which was issued on the blockchain. Ethereum.

The SEC said investors were led to believe that Up Global would limit the supply of UpToken, while Coinme would create constant demand for UpToken to fund a bitcoin ATM rewards program, helping to drive up the price. from UpToken.

According to the regulator, the claims were misleading because Up Global had quietly made transactions that reduced Coinme’s requirement for UpToken.

He also said Up Global and Bergquist falsely told investors the offering had raised $10 million to $18.9 million when they knew it had in fact raised much less, $3.65 million.

Without admitting or denying wrongdoing, Coinme and Up Global will together pay $3.77 million, while Bergquist will pay $150,000. Bergquist, 35, also received a three-year ban from being an officer or director of public companies.

Coinme did not immediately respond to requests for comment.

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

Gensler told the House Financial Services Committee on April 18 that crypto markets were “rife with non-compliance” that put investors at risk and undermined public confidence in capital markets. (Reporting by Jonathan Stempel in New York; Editing by Daniel Wallis)

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