SEC Allegations against CoinMe and Up Global
The Securities and Exchange Commission (SEC) accused CoinMe, Up Global SEZC, and CEO Neil Bergquist of offering unregistered securities through their initial coin offering (ICO) of UpToken (UP) between October and December 2017. The SEC also alleged that the parties made false claims about UpToken’s supply and demand, and misrepresented fundraising amounts.
Misleading Statements about UpToken
Up Global and Bergquist were accused of falsely stating that UpToken’s supply would be limited and that CoinMe would need to buy back the asset from investors. The SEC found that they actually secured a significant supply of the token before and during the ICO. Furthermore, they reported misleading fundraising amounts, claiming up to $18.9 million had been raised, when only $3.7 million was.
Fines and Restrictions for CoinMe, Up Global, and Bergquist
The SEC has ordered the involved parties to destroy all UpToken in their possession and refrain from participating in any cryptocurrency security offerings. CoinMe and Up Global must pay a combined $3.77 million in fines, while Bergquist must pay $150,000. The price of UpToken has plummeted following the announcement, with a market cap of around $50,000 and 24-hour trading volumes just over $180.
The SEC’s enforcement action against CoinMe, Up Global, and Neil Bergquist serves as a reminder of the regulatory oversight surrounding the cryptocurrency market. This case highlights the need for transparency and compliance with securities laws, particularly when it comes to initial coin offerings. The fines imposed on CoinMe, Up Global, and Bergquist demonstrate the potential consequences for companies and individuals that fail to adhere to these regulations. Investors should be cautious and vigilant when considering participation in ICOs and other digital asset investments to avoid potential financial losses due to unregistered securities or misleading claims.