The U.S. Securities and Exchange Commission (SEC) has settled securities fraud allegations against Seattle-based company Coinme Inc. for $4 million in fines.
US securities regulator Coinme, its subsidiary Up Global and Neil Bergquist, the CEO of both entities, are accusing them of violating securities laws for selling the digital asset UpToken (UP), according to an SEC announcement.
The SEC is also accusing Bergquist and Up Global of making false and misleading statements about the demand for UpToken and the amount raised in the initial coin offering (ICO).
The terms of the settlement include Up Global agreeing to pay a $3.52 million fine for which Coinme is liable, Coinme agreeing to pay a separate $250,000 fine, and Bergquist agreeing to pay a $150,000 fine .
The SEC charges cover the ICO between October 16, 2017 and December 15, 2017.
According to the SEC, Coinme, Up Global and Bergquist falsely marketed that investors could see a profit in collecting UpToken as Coinme planned to buy the digital asset on the secondary market after the ICO. The SEC continues that both Bergquist and Up Global had already taken steps to move potential UpToken investors forward.
Bergquist and Up Global took steps before and during the ICO to obtain an UpToken supply that would significantly reduce Coinme’s need to purchase UpToken after the ICO, as well as knowingly or recklessly publicly inflating amounts in the ICO. ”
The announcement also reveals that Coinme, Up Global and Bergquist have agreed to settle the charges without admitting or denying the SEC’s allegations.
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