On April 28, the US Securities and Exchange Commission (SEC) imposed fines on three parties involved in the ICO of an altcoin project, with cease and desist orders.
Penalties rained down from the SEC for the parties in this altcoin ICO!
The US Securities and Exchange Commission fined Up Global and Coinme $3.9 million. Meanwhile, the SEC’s latest filing mentions the founders and CEOs of both companies. A cryptocurrency securities presentation by Neil Bergquist, the founder and CEO of both companies, as well as Up Global and Coinme, was included, the SEC said. This presentation included the ICO sale of an Ethereum-based altcoin project called UpToken, which aims to fund the deployment of new Coinme ATMs.
The three parties have successfully raised about $3.65 million from the cryptocurrency ICO. Also, Coinme has partially spent these funds on new ATMs. Users who purchased UpToken received discounts and rewards when they used tokens at Coinme ATMs. However, the SEC claims that participants sold securities without registration and exemption from registration. The complaint is based on this.
Additionally, the SEC said that Up Global and Bergquist falsely claimed that Up Global would limit the supply of UpToken and Coinme would have to buy back the asset from investors, thereby creating demand and increasing the token value. In fact, Up Global and Bergquist provided a substantial supply of UpTokens before and during the ICO. In addition, Up Global and Bergquist noted that up to $18.9 million was raised when only $3.7 million was raised. This indicates that it is reporting misleading fundraising amounts.
Interested parties face fines and business requirements
The SEC’s order will require all three parties to destroy all UpTokens in their possession. Up Global and Coinme are also required to issue a notice regarding the order. In addition, they should request other trading platforms to remove the token from their services. The two companies are also required to indefinitely abstain from offering any cryptocurrency securities.
Bergquist should refrain from taking part in crypto securities offerings for only three years. Also, it will be okay for him to personally trade other cryptocurrencies. Meanwhile, as we have reported as Kriptokoin.com, both parties will pay fines to the SEC. Up Global will pay $3.52 million, CoinMe $250,000 and Bergquist $150,000. These penalties are close to the amount collected in the UpToken ICO.
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